The Trump administration is freezing nearly all federal loans, grants, and other financial assistance starting Tuesday afternoon, according to the Office of Management and Budget (OMB).
“Nothing in this memo should be construed to impact Medicare or Social Security benefits,” said the memo from OMB, which oversees the federal budget.
The order also clarified that financial assistance that is directly received by people will not be included under the federal pause in grants and aid.
While the memo addresses Medicare and Social Security, it makes no mention of Medicaid, the health insurance program that is managed by states but primarily funded by the federal government.
In response to a question about the future of Medicaid Tuesday, White House press secretary Karoline Leavitt said, “I’ll check back on that and get back to you.”
Further, OMB can “grant exceptions allowing federal agencies to issue new awards or take other actions on a case-by-case basis,” and “federal agencies may continue taking certain administrative actions, such as closeout of federal awards ... or recording obligations expressly required by law,” it said.
The order, which potentially impacts billions or even trillions of dollars in grants to state and local governments, said that grants and loans would be placed on hold while the Trump administration determines whether they are aligned with Trump’s priorities. That includes orders he signed this past week that end diversity, equity, and inclusion (DEI) programs.
Vaeth wrote in the memo that the use of federal resources for policies at odds with the president’s agenda “is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
The freeze includes any money intended “for foreign aid” and for “nongovernmental organizations,” among other categories.
“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” said the memo, which was uploaded online by multiple news outlets on Monday.
The OMB memo further said that the federal government spent nearly $10 trillion in fiscal year 2024, with more than $3 trillion devoted to financial assistance such as grants and loans.
After taking office this past week, Trump has issued a flurry of executive orders around federal programs and staffing. He placed a pause on all DEI programs and foreign aid, imposed a freeze on hiring, and fired some presidential appointees.
Democrats Strongly Object
Democrats criticized the order late on Monday.“We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law,” the Democrats wrote in their letter, adding that they are demanding that OMB ”reverse course to ensure requirements enacted into law are faithfully met and the nation’s spending laws are implemented as intended.”
During the 2024 campaign and after his election win, Trump has repeatedly said his administration won’t make changes to Medicare or Social Security, including in December 2024, when he told NBC News that “we’re not touching” the programs.
Months before that, in March, he told Breitbart that he would not “ever do anything that will jeopardize or hurt Social Security or Medicare,” saying that cuts should be made “elsewhere.”
