President Donald Trump was expected to issue more executive action on Monday – this time regarding defense issues and the military.
UPDATE: A federal judge on Tuesday temporarily blocked a push from President Donald Trump to pause federal funding. Read more here.
The White House is pausing federal grants and loans starting on Tuesday as President Donald Trump’s administration begins a review of its spending.
Administration officials said the decision was necessary to ensure that all funding complies with Trump's executive orders.
But what will that mean for you?
What does the pause do?
The funding freeze could affect trillions of dollars, at least temporarily, and cause widespread disruption in health care research, education programs and other initiatives. Even grants that have been awarded but not spent are supposed to be halted.
“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 a memo from Matthew Vaeth, the acting director of the Office of Management and Budget.
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It’s unclear from the memo how sweeping it will be. Vaeth said all spending must comply with Trump’s executive orders.
Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they will be affected.
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When does the freeze begin?
The pause was scheduled to take effect at 4 p.m. CT, just one day after agencies were informed of the decision.
Will billions for Medicaid be halted?
Medicaid is notably not exempt from the White House directive.
The U.S. Health and Human Services agency doles out over a half trillion dollars to states in a joint partnership to run Medicaid, the nation’s health care coverage for about 80 million of the poorest of Americans, including millions of children.
A spokesman for Illinois Gov. J.B. Pritzker’s office said the state’s agencies have reported issues accessing the website used to request disbursement for Medicaid payments.
HHS did not immediately respond to questions about the spending freeze and whether Medicaid payments would continue.
What does the freeze not include?
They also said that federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.
The Education Department said the pause doesn’t apply to grants received directly by individuals. That includes the more than 40 million Americans with federal student loans and 7 million with federal Pell Grants for low-income students.
This means students who rely on federal financial aid to pay for tuition and other costs are not expected to see any disruption from the pause. Department officials said they’re still reviewing the effect of the memo.
Medicare and Social Security benefits also won't be affected by the pause, that’s according to the memo on the pause from Matthew Vaeth, the acting director of the Office of Management and Budget.
But there was no explanation of whether the pause would affect Medicaid, food stamps, disaster assistance and other programs. The memo said it should be implemented “to the extent permissible under applicable law.”
What about the EPA?
An Environmental Protection Agency spokeswoman says the pause will “align federal spending and action with the will of the American people as expressed through President Trump’s priorities.”
The agency is temporarily pausing all activities related to the obligation or disbursement of EPA federal financial assistance, spokeswoman Molly Vaseliou said Tuesday.
The EPA controls billions of dollars in grants and other spending, including through the Inflation Reduction Act and the bipartisan infrastructure law, as well as programs intended to ensure safe drinking water and other goals. The money goes to state and local governments as well as tribes and nonprofit groups.
“EPA is continuing to work with OMB as they review processes, policies and programs, as required by the memorandum,” Vaseliou said.
What happens next?
Court battles are imminent, and Democratic New York Attorney General Letitia James plans to ask a Manhattan federal court to block the Republican president's moves.
“My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding,” she said on social media.
Democrats and independent organizations swiftly criticized the administration, describing its actions as capricious and illegal because Congress had already authorized the money.
Longtime budget watchers warned Trump’s funding freeze will threaten programs Americans depend on.
“This new OMB memo is certain to cause chaos and could result in serious harm to a broad swath of people and communities around the country,” wrote Sharon Parrott a former White House budget official who’s now president of the Center for Budget and Policy Priorities.
She said the Trump administration “seems determined to subvert Congress, its hand-waving about following the law notwithstanding.”
