Washington President Donald Trump’s administration imposed a surprise halt on almost all federal grants and loans Monday night, which has caused confusion among Congress, the government, state programs, and non-profits that depend on federal financing.
A two-page, ambiguously worded memo was distributed to all federal agencies Monday night by the Office of Management and Budget, instructing them to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.”
Additionally, the agency requested information on a variety of programs from federal departments that offer financial help in an 836-page spreadsheet that NBC News was able to receive.
- The federal Pell Grant program
- School meals for low-income students
- The WIC nutrition program for pregnant women and infants
- Wildfire preparedness for the Department of Interior
- The Medicare enrollment assistance program
- USAID foreign assistance
- Mine inspections
- A reintegration program for homeless veterans
OPM requested that the data be turned in by February 7.
Lawmakers rushed to determine the impact of the funding suspension on their constituents on Capitol Hill.
Rep. Rosa DeLauro, D-Conn., and Sen. Patty Murray, D-Wash., the Democratic leaders of the House and Senate appropriations committees, wrote to OMB, saying, “The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country.” They also claimed that the pause was illegal and unconstitutional.
Murray stated during a press conference Tuesday morning that the Senate Appropriations Committee has been attempting to contact the agencies in order to properly comprehend the effects.
In red states, blue states, cities, suburbs, and rural places, this is a dagger at the core of the typical American family. During a press conference on Tuesday morning, Senate Minority Leader Chuck Schumer, D-N.Y., told reporters, “It is just outrageous.”
When NBC News contacted groups that represent small companies and non-profit organizations, they said they were also having trouble determining what the ramifications would be for their members, such as those who provide early childhood education, housing, and health care.
Although we recognize that this is a developing story, Yasmina Vinci, executive director of the National Head Start Association, stated that this disruption will, at most, make it more difficult for Head Start agencies to compensate the hundreds of thousands of employees, contractors, and small businesses that support Head Start operations across the nation. Hundreds of thousands of households will, at worst, be unable to rely on the essential services and probably won’t be able to work.
Members of the National Low Income Housing Coalition were encouraged to contact members of Congress in order to “push back against the Trump administration’s extreme order to withhold federal investments.”
According to the OMB document released Monday night, the funding review would focus on “activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
According to a Republican operative, the party had long sought to stop most of this federal help, but it was noteworthy that Trump was taking on all of it at once.
According to a Republican operative, some of this material has only been discussed in jest at cocktail parties at the Heritage Foundation. In fact, they’re doing everything.
House Appropriations Chairman Tom Cole, R-Okla., backed Trump’s assistance freeze in an interview at the House Republicans’ issues conference at Trump National Doral, saying it allows Republicans to instantly cut spending they oppose.
They’re acting appropriately, in my opinion. He stated, “They’re taking charge of the situation.” “At the end of the Biden administration, a lot of money is leaving. You know, that’s quite normal. Therefore, I believe they want to take charge of that and ensure that nothing is happening that they disagree with. Additionally, they have every right to do so.
Lawmakers and policy experts were unsure whether the freeze would also impact financing for the 72 million Medicaid recipients of health insurance. Medicaid funds are sent directly to states by the federal government, who then manage the program and reimburse hospitals and physicians for the services they render.
According to Brian Riedl, a senior scholar at the Manhattan Institute who has worked on budget matters for Republican senators, the memo is ambiguous and might include Medicaid. “But it s more likely that OMB is focusing on competitive grants, loans, and contracts to private organizations, businesses, and perhaps local governments, rather than formula grants to states where the recipients are further removed from Washington controls.”
The message stated that the freeze would not apply to direct payments to people, Social Security, or Medicare.
Additionally, small firms were unsure of how the moratorium would affect Small Business Administration financing.
In a statement, National Small Businesses Association President Todd McCracken stated, “We’re hearing from members who are concerned and unsure how this could impact existing loans or loans already in the pipeline.”