The White House Has Temporarily Frozen All Federal Grants And Loans, Affecting Billions Of Dollars In Payments

The White House's budget office has temporarily frozen all federal grants.

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• The White House has put a temporary freeze on all federal grants and financial assistance programs.
• It called for federal agencies to ensure that their grants are aligned with the administration's priorities.
• The pause, announced via an internal memo on Monday, will go into effect on Tuesday at 5 p.m.

The White House's budget office said it would pause the payment of all federal grants on Tuesday, according to an internal memo sent to federal agencies on Monday, published in its entirety by The New York Times.

The two-page memo by Matthew J. Vaeth, the acting director of the Office of Management and Budget, said that there would be a "temporary pause" in the "disbursement of all Federal financial assistance," effective from Tuesday at 5 p.m.

"This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President's priorities," the memo said.

The pause aims to clamp down on government spending linked to "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal," the memo said.

It said that these were a "waste of taxpayer dollars."

Vaeth's memo called for all federal agencies to do a comprehensive analysis of their grants and programs to ensure that they align with the new administration's priorities.

The freeze could be a blow to states that depend on the federal government's coffers, like Alaska, which in 2023 received more than $6,500 per capita in federal grants, according to a report by the Federal Funds Information for States.

A large percentage of the grants — more than half in the case of Alaska — goes toward Medicaid, FFFIS wrote in the October report.

This comes as President Donald Trump, in his first week in office, has undone policies related to ending diversity, equity, and inclusion. Shortly after his inauguration, he signed an executive order ending DEI programs in the federal government.

Trump has also created the Elon Musk-run "Department of Government Efficiency" or DOGE, to cut government spending and roll back regulations.