A leaked memo from the Office of Management and Budget reveals that President Trump has ordered a temporary halt to federal grants and loans, eliciting strong backlash from Democrats who warn of dire consequences for essential programs.
Federal Grants and Loans Halted by White House Amid Controversy
Federal Grants and Loans Halted by White House Amid Controversy
The White House has paused federal financial assistance prompting widespread concern among lawmakers and advocacy groups regarding its potential impact.
Article text:
In a significant financial maneuver, the White House has temporarily halted federal grants, loans, and other forms of assistance, as revealed by a leaked memo authenticated by CBS News, a partner of the BBC. The memo, issued by the acting director of the Office of Management and Budget (OMB), directs federal agencies to review their spending in light of the president's priorities.
As the full implications of this pause remain unclear, it's noted that essential programs like Medicare and Social Security will continue unaffected. This latest move arrives only days after the US government ceased nearly all foreign aid. Critics, primarily from the Democratic Party, have expressed alarm, forecasting "devastating consequences" for crucial initiatives such as cancer research, food assistance, and mental health resources. Diane Yentel, representing the National Council of Nonprofits, voiced her concerns about the adverse effects this pause could have on vital assistance programs.
The OMB memo underscores that spending currently on hold was previously allocated by Congress, which raises questions regarding potential legal challenges over the extent of presidential authority. In an urgent directive, the OMB's acting head, Matthew Vaeth, mandates all agencies to pause the approval of new financial aid and the distribution of funds under ongoing allocations. They are also instructed to report on which programs have been suspended by February 10, 2023.
Democratic leaders wasted no time in reacting, with Washington Senator Patty Murray and Connecticut Congresswoman Rosa DeLauro expressing "extreme alarm" over the memo's contents. "The scope of what you are ordering is breathtaking," they wrote in a letter to the White House. Meanwhile, Senate Democratic minority leader Chuck Schumer emphasized that these investments were mandated by law and not discretionary, warning that the halt would disrupt payments and create chaos in various sectors, including education and non-profit organizations.
This pause by the White House is compounded by recent news from the State Department, which announced a suspension of nearly all foreign assistance, leaving only emergency food aid and military funding for select countries unharmed. Trump's earlier executive order called for a 90-day review of foreign development assistance, with a focus on aligning it with his administration's foreign policy goals, undoing years of established aid practices. The US, typically the world’s largest donor, contributed $68 billion in international aid in 2023, but the recent actions may redefine its future trajectory.
In a significant financial maneuver, the White House has temporarily halted federal grants, loans, and other forms of assistance, as revealed by a leaked memo authenticated by CBS News, a partner of the BBC. The memo, issued by the acting director of the Office of Management and Budget (OMB), directs federal agencies to review their spending in light of the president's priorities.
As the full implications of this pause remain unclear, it's noted that essential programs like Medicare and Social Security will continue unaffected. This latest move arrives only days after the US government ceased nearly all foreign aid. Critics, primarily from the Democratic Party, have expressed alarm, forecasting "devastating consequences" for crucial initiatives such as cancer research, food assistance, and mental health resources. Diane Yentel, representing the National Council of Nonprofits, voiced her concerns about the adverse effects this pause could have on vital assistance programs.
The OMB memo underscores that spending currently on hold was previously allocated by Congress, which raises questions regarding potential legal challenges over the extent of presidential authority. In an urgent directive, the OMB's acting head, Matthew Vaeth, mandates all agencies to pause the approval of new financial aid and the distribution of funds under ongoing allocations. They are also instructed to report on which programs have been suspended by February 10, 2023.
Democratic leaders wasted no time in reacting, with Washington Senator Patty Murray and Connecticut Congresswoman Rosa DeLauro expressing "extreme alarm" over the memo's contents. "The scope of what you are ordering is breathtaking," they wrote in a letter to the White House. Meanwhile, Senate Democratic minority leader Chuck Schumer emphasized that these investments were mandated by law and not discretionary, warning that the halt would disrupt payments and create chaos in various sectors, including education and non-profit organizations.
This pause by the White House is compounded by recent news from the State Department, which announced a suspension of nearly all foreign assistance, leaving only emergency food aid and military funding for select countries unharmed. Trump's earlier executive order called for a 90-day review of foreign development assistance, with a focus on aligning it with his administration's foreign policy goals, undoing years of established aid practices. The US, typically the world’s largest donor, contributed $68 billion in international aid in 2023, but the recent actions may redefine its future trajectory.
