The White House Office of Management and Budget (OMB) has directed all federal agencies to pause the disbursement of grants and loans, according to an internal memorandum issued on

Monday. The freeze could impact trillions of dollars in government spending and disrupt public programs that serve millions of Americans.

In the memorandum, OMB Acting Director Matthew Vaeth stated, “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.” A copy of the memo was obtained by CNN. The directive also halts the issuance of new grants, though Social Security and Medicare benefits, along with direct individual assistance, will not be affected.

The pause is set to take effect at 5 p.m. on Tuesday and is framed as a measure to allow the administration to reassess funding priorities. “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 memorandum aligns with recent executive orders issued by former President Donald Trump, signaling an effort to align federal spending with his administration’s policy goals. The freeze extends to financial assistance for foreign aid, nongovernmental organizations, diversity and inclusion initiatives, and environmental programs associated with the Green New Deal.

Vaeth further emphasized the administration’s priorities in the memo, stating, “Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again.”

Programs perceived to advance what Vaeth described as “Marxist equity, transgenderism, and green new deal social engineering policies” were singled out as misuses of taxpayer funds. Exceptions to the freeze may be granted on a case-by-case basis, but agencies must first seek approval from OMB. Agencies are also required to submit detailed reports by February 10 on any programs affected by the directive.

The decision has drawn sharp criticism from Democratic lawmakers. Senator Patty Murray of Washington and Representative Rosa DeLauro of Connecticut, both senior members of Congress’s appropriations committees, expressed their alarm in a letter to the White House on Monday night. “The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” they wrote.

Senate Minority Leader Chuck Schumer also condemned the move, describing it as a violation of congressional authority. “Congress approved these investments, and they are not optional; they are the law,” Schumer stated. He warned that the pause could lead to missed payrolls, disrupted university programs, and financial challenges for nonprofit organizations nationwide.

“This action jeopardizes billions upon billions of community grants and financial support that help millions of people across the country,” Schumer added. “It will mean chaos for everything from families to local charities.”

The full implications of the directive remain unclear, but critics warn that it could cause significant disruptions to federally funded programs that many Americans rely on daily.