Trump orders suspension of all federal grants

(MENAFN) U.S. President Donald Trump has ordered a suspension of all federal grants and loans starting Tuesday, a sweeping measure that could disrupt a wide array of programs, including education, health care, housing, welfare, disaster relief, and more, all of which rely on federal funding. The directive, detailed in a memo released Monday by Matthew Faith, acting head of the Office of Management and Budget (OMB), states that funding would be paused as the Trump administration reviews grants and loans to ensure they align with the president’s priorities. These priorities include recent executive orders that aim to end diversity, equality, and inclusion initiatives.

Faith emphasized that the use of federal resources for policies not in line with the president’s agenda is a waste of taxpayer money and fails to improve the lives of citizens. The halt applies to various funding categories, including foreign aid and support for non-governmental organizations (NGOs). However, the White House has clarified that essential programs such as Social Security payments, Medicare, food assistance for the poor, and direct aid to individuals will remain unaffected. The impact on health care for veterans and low-income individuals remains uncertain.

The OMB memo highlighted that the federal government spent around $10 trillion in the fiscal year 2024, with over $3 trillion allocated to financial aid programs like grants and loans. However, the Congressional Budget Office has estimated that actual government spending for 2024 will be around $6.75 trillion. This decision is part of the Trump administration’s broader effort to radically reshape the federal government, which includes halting diversity programs, imposing a hiring freeze, cutting foreign aid, and stripping civil servants of job protections. The funding suspension is set to take effect at 2200 GMT on Tuesday.

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