Trump withdraws order halting disbursements for social programs worth billions a year
The decision had been stayed by a federal judge in Washington but caused chaos throughout the administration
Donald Trump continues to make controversial decisions just a week after reclaiming the presidency of the United States. On Monday, the White House Budget Office issued a directive to all federal departments and agencies to freeze the disbursement of loans, grants, and aid while the administration reviews whether these programs align with its priorities. The directive notes that such actions will comply with the law. However, in a U-Turn a day after its entry into force was suspended by a judge, the Trump administration rescinded its directive: “OMB (Office of Management and Budget) Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,” reads the new instruction from Matthew Vaeth, acting director of the budgetary office attached to the White House, who signed the initial document.
The policy change came after a chaotic 48 hours for the White House, as states and local governments had expressed concern that healthcare funding, disaster relief, and infrastructure spending could be disrupted or delayed during the broad policy rollout.
The two-page memo, first circulated on social media and later verified by U.S. media, sparked widespread confusion and uncertainty among federal agencies and program beneficiaries. Trump also halted aid to impoverished countries for lifesaving medicines targeting HIV, AIDS, malaria, and other diseases, which threaten millions of lives.
The original memo ordered federal agencies to temporarily suspend “all activities related to obligation or disbursement of all federal financial assistance.” It stated: “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.”
While the Trump administration focuses on reshaping federal spending priorities, it has decided to halt public funding across a broad range of programs. This decision affects the allocation of hundreds of billions, potentially trillions, of dollars annually.
Among the recipients of federal funding are state and local governments, with programs supporting education, transportation, and more. The freeze would have also have affected small business loans, university research grants, funding for nonprofit healthcare organizations, and numerous other aid programs.
The directive specified that the freeze does not apply to Medicare, the public health insurance system, or Social Security benefits. Aid directed explicitly to individuals is also exempt, though the scope of this exception remains unclear. Moreover, the majority of affected programs are not directly distributed to individuals but are channeled through intermediary organizations.
It is uncertain whether Trump even has the legal authority to enact such a sweeping freeze. Senate Minority Leader Charles Schumer, a Democrat, condemned the move, in a message on X: “More lawlessness and chaos in America as Donald Trump’s Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country. If this continues, the American people will pay an awful price.”
Schumer further argued: “Congress approved these investments and they are not optional, they are the law. These grants help communities in red states and blue states and support families, help parents raise kids, and lead to stronger communities.” He also expressed skepticism over claims that the freeze is temporary.
The memo instructs federal agencies to review all federal financial assistance programs and activities to ensure alignment with Trump’s policies. It references executive orders and other provisions issued on his first day back in office, signaling a decisive shift from the Biden administration’s priorities, including the green agenda, diversity and inclusion policies, foreign aid, and immigration.
To implement these orders, the memo states: “Each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the president’s executive orders.”
Pending this review, the instruction mandates that, “to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI [diversity, equity, and inclusion], woke gender ideology, and the green new deal.”
The directive was set to take effect at 5:00 p.m. in Washington on Tuesday. Federal agencies had been given until February 10 to submit detailed reports identifying all programs, projects, and activities subject to the pause in disbursements.
NGOs: ‘This is catastrophic’
“This order is a potential 5-alarm fire for nonprofits and the people and communities they serve,” said Diane Yentel, director of the National Council of Nonprofits, in a message on X. “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. This order could decimate thousands of organizations and leave neighbors without the services they need.”
As part of the freeze on foreign aid outlined in executive orders signed on his first day in the White House, the Trump administration has moved to halt the supply of life-saving drugs for HIV, malaria, and tuberculosis, as well as essential medical supplies for newborns, Reuters reports.
On Tuesday, contractors and partners working with the U.S. Agency for International Development (USAID) began receiving notifications. One memo, addressed to the firm Chemonics and seen by Reuters, instructed the company to halt its aid efforts for HIV, malaria, and tuberculosis, along with the distribution of contraceptives and maternal and child health supplies, according to a source and a former USAID official.
“This is catastrophic,” said Atul Gawande, former head of global health at USAID who left the agency this month. “Donated drug supplies keeping 20 million people living with HIV alive. That stops today.”
Gawande warned that interruptions in disease treatment put patients at risk of severe illness and, in the case of HIV, increase the likelihood of transmission. Additionally, he noted the heightened danger of drug-resistant strains of diseases emerging as a result of disrupted treatments.
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