In a dramatic move, President Donald Trump has ordered a temporary pause on all federal grants, loans, and financial assistance programs. The shocking decision was revealed in a leaked memo, sending waves through the government.
What’s exempt from the pause?
The White House budget office has instructed federal agencies to “halt all activities related to obligation or disbursement of all federal financial assistance.” This means no new grants or loans will be issued for the time being. However, the pause will not affect Social Security or Medicare benefits, which are explicitly exempted in the memo.
Immediate freeze on federal programs
The suspension will take effect immediately, starting at 5 p.m. EST today. Agencies have until February 10 to submit a comprehensive report on any programs, projects, or activities impacted by the pause. The administration is using this time to carefully review agency programs and decide where the funds should go, ensuring it aligns with Trump’s policy priorities.
Agencies have also been instructed to pinpoint any legally mandated deadlines for assistance programs. This will ensure the government stays compliant with the law, despite the temporary shutdown.
Memo signed by acting budget director Matthew Vaeth
The memo was signed by Matthew Vaeth, the acting director of the Office of Management and Budget. It clearly states that agencies must “pause all activities” connected to funding opportunities. This move aligns with Trump’s broader plan to overhaul government spending and prioritize his policy goals.
In particular, the suspension appears to target programs related to diversity, equity, and inclusion (DEI), foreign aid, and climate change initiatives. The pause also extends to any financial support linked to “woke gender ideology” and the Green New Deal, which have been controversial topics for Trump’s administration.
White House silent on leaked memo
The White House has not yet commented on the leaked memo. However, DailyMail.com has reached out for an official response.
This bold action comes just days after Trump returned to office. Since his return, Trump has taken swift action to reshape the federal bureaucracy, including firing or reassigning hundreds of workers. His goal? To dismantle what he believes is a federal structure that has been hostile to his agenda. In particular, he has targeted the U.S. Agency for International Development (USAID), putting around 60 senior officials on leave.
On Saturday, the administration urged staff to align foreign aid distribution with Trump’s “America First” policy. Any staff who defy the new directive face potential disciplinary action.
Internal memo exposes USAID shake-up
An internal memo sent to USAID employees revealed that the agency’s new leadership had identified several actions aimed at circumventing Trump’s Executive Orders. As a result, several employees have been placed on administrative leave while the administration reviews these activities.
This freeze on aid programs has raised concerns, especially considering the U.S. is the world’s largest single donor of humanitarian aid. In 2023, the U.S. disbursed a whopping $72 billion in assistance, accounting for nearly half of all humanitarian aid tracked by the United Nations in 2024.
Trump’s 90-day foreign aid pause
Just hours after taking office, Trump ordered a 90-day pause on foreign aid to ensure it aligns with his foreign policy goals. On Friday, the State Department issued a global stop-work order, halting all aid programs, even those already in progress.
This suspension could have far-reaching consequences, threatening life-saving aid to millions. Trump’s move signals a major shift in how the U.S. approaches international assistance and domestic funding programs, as the administration continues to reshape government priorities in line with its “America First” agenda.
