Trump Orders Pause on Federal Financial Assistance

On Jan. 27, Acting Director of the Office of Management and Budget (OMB) Matthew J. Vaeth issued a memorandum ordering federal agencies to review “all Federal financial assistance programs and supporting activities” and identify those impacted by executive orders by Feb. 10. The memo further directs agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance” beginning at 5 p.m. the following day, on Jan. 28.

The memo specifies that the pause applies to issuance and disbursement of funds and other “relevant agency actions” affected by the administration’s executive orders, including “foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” “to the extent permissible by law.” It specifies that Medicare, Social Security, and “assistance provided directly to individuals” will not be affected. Such a broad freeze on funding could potentially affect trillions of dollars dedicated to healthcare, scientific research, education programs, and more.

In purporting to withhold federal funds already appropriated by Congress, the memo represents a direct challenge to the legislature’s power of the purse.  Under the Impoundment Control Act of 1974, the president is prohibited from ordering rescission of Congressionally appropriated spending. The act does allow the president to request the rescission of specific discretionary spending, but requires that Congress approve any proposed rescissions within 45 days—a requirement that this memo does not address. The president is also permitted to propose “deferrals” of funds, but only according to a specified process not followed here. Democratic members of Congress and state attorneys general have condemned the memo as illegal and unconstitutional.

Read the memo here or below.