The White House budget office has ordered a temporary freeze on all federal grants and loans, a move that could impact trillions in government spending and halt public programs. The pause, set to begin Tuesday at 5 p.m., excludes Social Security, Medicare, and direct individual assistance.

What to Know:

• The freeze aims to allow the administration to align federal spending with President Donald Trump’s priorities.
• It affects financial assistance for foreign aid, NGOs, DEI, and climate initiatives, among other programs.
• Exceptions may be granted on a case-by-case basis, per the Office of Management and Budget memo.
• Congressional leaders have expressed strong opposition, citing devastating consequences for communities nationwide.
• Trump has signed a raft of executive orders since entering office on January 20.

Stay with Newsweek as we continue to follow this developing story.

Why has Trump paused federal grants?

President Donald Trump has ordered all federal agencies to stop issuing federal grants and loans, according to an internal memorandum sent on Monday.

The new order may impact billions of dollars in funding allocated to state and local governments. The federal government funds thousands of programs, including research projects, housing subsidies and educational grants.

The president has signed a raft of executive orders since entering office on January 20. The memo says it applies to prior executive orders for various initiatives, including domestic infrastructure, energy projects, diversity programs, and foreign aid.

“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,” read the memo, authored by Matthew J. Vaeth, acting director for the Office of Management and Budget.

“This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities,” Vaeth wrote.

The memo continued: “To implement these orders, each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that maybe implicated by any of the President’s executive orders.”

Newsweek has contacted the White House and the Office of Management and Budget via email for comment outside of regular working hours.

Read the full story by Aliss Higham on Newsweek.