Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
US federal agencies are set to freeze the payment of hundreds of billions of dollars of domestic federal grants and loans on Tuesday in President Donald Trump’s latest aggressive move to slash and overhaul government spending.
The pause in federal financial assistance — which is due to take effect at 5pm local time in Washington — could jeopardise a wide range of funding, from scientific and medical research to small business loans, food aid and early childhood education.
The White House order would hit communities across the country that are heavily dependent on government support, and immediately triggered a backlash from Democrats.
Opposition lawmakers blasted it as an illegal power grab by Trump that defied the constitutional role of lawmakers in approving spending and warned that it would potentially harm the US economy.
“Freezing federal funding that has already been allocated by Congress is unconstitutional; above all else, it’s inhumane,” said Dick Durbin, the Democratic senator from Illinois.
Two senior Democrats, Patty Murray and Rosa DeLauro, wrote to Matthew Vaeth, acting director of the Office of Management of the Budget, saying: “The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country.”
Trump’s move was announced in a memo by Vaeth on Monday that marked the latest in a series of executive actions by the president to force the civil service and government agencies to align with his policies.
It comes after Trump ordered a halt to new funding for clean energy projects. The state department has also started implementing a pause on virtually all foreign aid pending a review of whether it adheres with the Trump administration’s plans.
Vaeth’s memo pointed to hot-button issues for conservatives, saying: “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 Trump administration told agencies to submit information about their grants and loans to the White House by February 10, meaning many programmes will be in limbo until at least then. The administration said that the US spent $3tn in the 2024 fiscal year on federal financial assistance, but it is unclear how much of that would ultimately be cut.
While the order does not cover government pension programmes or healthcare for seniors, it represents Trump’s boldest attempt yet to shrink the size of domestic federal spending, and centre it exclusively on priorities championed by ideological conservatives.
On Tuesday, Karoline Leavitt, the White House press secretary, told reporters that the order did not amount to a “blanket pause” and described it as a “temporary” measure to unwind funding for programmes Trump has railed against, such as ones that support diversity and inclusion.
The administration also told lawmakers that programmes such as Medicaid, the health insurance scheme for low-income Americans, and Snap, a food assistance programme, would not be paused, according to a second memo seen by the Financial Times. The memo added that funds would not be frozen for other important schemes, such as those that support small businesses, farmers and undergraduate students.
A radical revamp of the federal government has long been sought by Russell Vought, Trump’s pick to be White House budget director, and the authors of Project 2025, a blueprint for the incoming Republican administration assembled in recent years by the Heritage Foundation, a conservative think-tank.
Trump distanced himself from Project 2025 during the election campaign against Joe Biden and Kamala Harris last year, since many of its prescriptions were too controversial, but some of its policies are appearing in his first executive actions.
Trump has separately tasked Elon Musk, the technology billionaire, with slashing government spending as part of the newly created “Department of Government Efficiency” to root out waste, fraud and abuse in federal operations, but this week’s move goes beyond that effort.
Sawyer Hackett, a Democratic strategist, said his party needed to lay down a marker after the blitz of executive orders from the Trump administration over the past week and take a stand over the funding freeze.
“Senate Democrats need to say ‘there will be zero Democratic votes to consider or confirm any Trump nominees until the reckless funding freeze is reversed,” he said. “It’s not a fait accompli. We have leverage. Use it.”
Jeff Merkley, the leading Democrat on the Senate budget committee, vowed to delay a hearing to confirm Vought “until we answer these questions and resolve this constitutional crisis”.
