WASHINGTON - The White House, under Donald Trump administration, has announced a temporary suspension of federal grants, loans, and financial assistance programs managed by the Office of Management and Budget (OMB). This decision, passed through an internal memo reviewed by Reuters, aims to align federal spending with the administration’s policy priorities.
The move follows a series of Executive Orders (EO) signed by President Donald Trump, focusing on eliminating initiatives related to diversity, equity, and inclusion.. The suspension also impacts programs connected to foreign fund, non-governmental organizations, gender-related policies, and elements of the Green New Deal.
Federal Spending to Reflect National Priorities
The memo underlines the administration’s intention to ensure that taxpayer money is directed toward key national goals. "Government resources must serve the interests of the American people," said a senior official, Vaeth. The outlined priorities include reducing inflation, strengthening domestic energy production, supporting American manufacturing, and improving government efficiency.
It also criticized past expenditures on “social engineering projects,” specifically highlighting concerns about funding for diversity, equity, and inclusion, transgender policies, and programs tied to the Green New Deal. These initiatives, according to the memo, were labeled as misaligned with the administration’s objectives and not beneficial to the daily lives of American citizens.
Exceptions and Next Steps for Agencies
Although the freeze halts new grants and loans, the memo allows agencies to request exceptions from the Office of Management and Budget on a case-by-case basis. Agencies are also authorized to wrap up administrative tasks related to existing grants, provided these actions are legally required.
Federal agencies have till February 10 to submit detailed reports outlining how this suspension will affect their programs and operations. The freeze officially takes effect on January 28 at 5 pm.
Review and Realignment of Federal Funding
The White House emphasized that this pause would enable a thorough review of agency programs to ensure future funding aligns with the administration’s policies. Agencies are also tasked with identifying legally mandated deadlines for assistance programs during this evaluation period.
In a directive to federal agencies, Vaeth stated, “This is an opportunity to reevaluate financial assistance programs to ensure they align with President Trump’s vision for America.”
