A memo from the White House budget office is calling for a spending freeze on federal assistance by 5 p.m. Tuesday, which could affect everything from aid to nonprofits, universities, small business loans and state and local government grants.
The freeze could have wide-ranging implications, with the White House noting that $3 trillion was spent in 2024 on federal assistance programs.
“This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements,” the memo says.
The White House has not yet commented on the memo, which was leaked Monday night. CBS News has confirmed its authenticity.
The Monday night memo from the Office of Management and Budget is directing federal agencies to assess compliance with President Trump’s executive orders — specifically targeting “DEI, woke gender ideology and the Green New Deal.” It does not give specifics on what these policies refer to, especially since the Green New Deal was never signed into law.
“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,” the memo says.
The White House memo said it will not affect Medicare or Social Security benefits.
Democrats were already on the offensive on Tuesday morning, with Senate Minority Leader Chuck Schumer criticizing the move’s “lawlessness and chaos” and saying it is “holding up virtually all vital funds that support programs in every community across the country.”
“Congress approved these investments and they are not optional; they are the law,” Schumer said in a statement.
Schumer noted that this temporary freeze could affect disaster assistance, aid to elderly and school lunch programs.
Diane Yentel, the president and CEO of the National Council of Nonprofits, issued a statement on social media calling the order a “potential 5-alarm fire for nonprofits.”
“From pausing research on cures for childhood cancer to closing homeless shelters, halting food assistance, reducing safety from domestic violence, and shutting down suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives,” Yentel said. “This order could decimate thousands of organizations and leave neighbors without the services they need.”
The memo is likely to prompt legal challenges from entities who were set to receive the now-frozen funds, and they could come quickly. Orders from lower courts directing agencies to turn the spigot back on while legal proceedings continue could eventually lead the Justice Department to seek emergency relief from the Supreme Court.
Critics of the most recent action from the Trump administration have argued that the budget office’s move to temporarily withhold federal funds violates the Impoundment Control Act, a 1974 law that lays out the framework for the president’s ability to freeze certain funds appropriated by Congress.
But Russ Vought, Mr. Trump’s pick to lead the Office of Management and Budget, told the Senate panel holding his confirmation hearing last week that the president believes the Impoundment Control Act is unconstitutional, and said he agrees with that assessment.
