President Donald Trump's administration has issued a broad freeze on federal aid, halting domestic and foreign funding programs to reassess their alignment with his policy agenda. The sweeping directive, announced in a memo from the Office of Management and Budget (OMB), took effect Tuesday at 5 p.m. ET, sending shockwaves through Capitol Hill and triggering immediate backlash from Democratic lawmakers.
The memo, authored by Acting OMB Director Matthew J. Vaeth, orders federal agencies to pause activities related to the disbursement of financial assistance, including funds for foreign aid, diversity and inclusion programs, and environmental initiatives such as the Green New Deal. The directive exempts Social Security, Medicare, and direct payments to individuals, according to the document obtained by NBC News.
"Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance," the memo stated, emphasizing that the freeze allows time to evaluate the alignment of federal programs with the president's conservative priorities. Agencies have been instructed to report by February 10 on how their programs conform to the new directive.
The announcement comes just days after Trump signed a flurry of executive orders aimed at reversing key policies of the Biden administration. During a speech at a House Republican policy retreat held at his Doral golf resort in Miami, Trump said his administration was moving with "historic speed" to dismantle what he called the failures of the previous administration.
The decision has ignited a firestorm of criticism on Capitol Hill, where Democrats argue that the move undermines Congress's constitutional authority over federal spending. Rep. Rosa DeLauro (D., Conn.) and Sen. Patty Murray (D., Wash.), chairs of the House and Senate appropriations committees, wrote to OMB expressing their concerns. "The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country," they stated. They further argued that the pause could disrupt critical services and is both unconstitutional and unlawful.
Senate Majority Leader Chuck Schumer (D., N.Y.) joined the criticism, labeling the freeze as a blatant overreach. "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," Schumer said. "Congress approved these investments, and they are not optional; they are the law."
Governors also voiced their objections, including Illinois Governor J.B. Pritzker, who called the action unconstitutional and vowed to resist its implementation. "In Illinois, we will stand against unlawful actions that would harm millions of working families, children, and seniors," Pritzker posted on X, formerly Twitter.
Economists and policy analysts are warning of potential disruptions to programs reliant on federal funding. Brian Riedl, a senior fellow at the Manhattan Institute, noted that the freeze could impact billions of dollars, affecting grantees who depend on timely disbursements. "The funding delays are going to prove very difficult for grantees under the impression the money is coming and have rent and salary payments dependent upon it," Riedl said. "It seems like a very big deal."
The administration defended the freeze, framing it as a necessary measure to eliminate what it calls the "weaponization of government" and to ensure that taxpayer dollars are spent in line with Trump's priorities. A senior administration official described the pause as a strategic step toward restructuring federal funding to better reflect conservative values.
The memo, however, has created confusion within federal agencies and among funding recipients. Analysts suggest the lack of specificity about which programs are directly impacted has heightened uncertainty. Some agencies are reportedly scrambling to identify legally mandated actions or deadlines that could be affected by the freeze.
