The Trump administration panicked consumers and sent shockwaves through government agencies when it sent a memo Monday night calling for a funding freeze to enter effect at 5 p.m. Tuesday, potentially pausing a broad range of grant, loan and aid programs that will conflict with the brand new president’s priorities.
The White House instructed agency heads to temporarily pause spending in areas including “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology and the green latest deal,” in response to the memo from Matthew Vaeth, acting director on the Office of Management and Budget (OMB).
Lawmakers, government officials, states and other stakeholders are still in search of answers about what this directive actually means. The memo noted that the federal government spent greater than $3 trillion in federal financial assistance in fiscal 12 months 2024, nevertheless it’s unclear how much of this spending might be paused because of this of President Donald Trump’s latest motion.
Adding to the confusion: A few of the things that Trump is targeting aren’t even laws. For instance, the Green Latest Deal was a sweeping climate resolution first introduced by Rep. Alexandria Ocasio-Cortez, D-N.Y., in 2019 that has not been passed. It’s possible the OMB memo is referring to climate actions that were included within the Inflation Reduction Act, which Congress passed in 2022, though it is not clear.
What’s impacted by Trump’s federal funding freeze?
The situation is changing rapidly, but speaking broadly, the memo’s concentrate on DEI (diversity, equity and inclusion), foreign aid and other concerns of the brand new administration provided some hints about what might be paused.
In a news conference Tuesday morning, Senate Minority Leader Chuck Schumer, D-N.Y., said the memo “has shut off billions, perhaps trillions of dollars that directly support states, cities, towns, schools, hospitals, small businesses and most of all, American families.” He went on so as to add that “funds for things like disaster assistance, local law enforcement, rural hospitals, aid to the elderly, food for people in need — all are on the chopping block on this latest administration.”
On Tuesday, the Meals on Wheels nonprofit said it feared that funding might be affected by the freeze. Meals on Wheel is a food assistance program geared toward older Americans.
“The uncertainty immediately is creating chaos for local Meals on Wheels providers not knowing whether or not they ought to be serving meals today,” Jenny Young, a spokeswoman for Meals on Wheels America, told HuffPost. “Which unfortunately means seniors will panic not knowing where their next meals will come from.”
Democrats also raised alarm later within the afternoon about impacts to Medicaid, a program that gives medical insurance for low-income Americans.
Sen. Ron Wyden, D-Ore., wrote on X that “Medicaid portals are down in all 50 states following last night’s federal funding freeze,” referring to the digital systems utilized by health care providers to administer Medicaid payments. During a press briefing Tuesday afternoon, White House Press Secretary Karoline Leavitt was unable to say how the memo may affect Medicaid.
“The White Home is aware of the Medicaid website portal outage. We’ve got confirmed no payments have been affected — they’re still being processed and sent,” Leavitt later posted on X. “We expect the portal will probably be back online shortly.”
What is not impacted by Trump’s federal funding freeze?
The initial OMB memo explicitly confirmed that Social Security and Medicare won’t be affected by the freeze.
Leavitt added during Tuesday’s briefing that the Supplemental Nutrition Assistance Program (SNAP), aka food stamps, and other welfare advantages won’t be impacted.
“This isn’t a blanket pause on federal assistance and grant programs,” she said. “Assistance that’s going on to individuals won’t be impacted by this pause.”
So far as student loans, after some initial confusion, the Department of Education confirmed that federal Pell Grants and direct loans won’t be impacted, in response to multiple reports.
How long will the funding pause last?
A Q&A document from the OMB noted that it’s working with agencies to quickly approve certain programs and said “a pause might be as short as a day.”
Leavitt said throughout the press briefing that “it’s a short lived pause” while the administration is “reviewing the federal funding that has been going out the door.”
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