The Trump administration issued a memo Monday night that freezes funding for nearly $3 trillion in grants, loans, and financial assistance effective as of 5:00 PM on January 28. The orders call on all federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be impacted 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.”
What’s in the Memo?
The memorandum emphasizes the administration’s commitment to ensuring that federal funds support its core policy objectives, including:
Economic Prioritization: Advancing energy independence and American manufacturing.
Regulatory Rollbacks: Eliminating funding for diversity, equity, and inclusion (DEI) initiatives, green energy programs, and what the administration calls “woke gender ideology.”
National Security & Foreign Policy: Reevaluating foreign aid programs and redirecting funds to domestic priorities.
Government Efficiency: Reducing bureaucratic spending and enhancing oversight of federal financial assistance.
Agencies have until February 10 to submit information on any programs, projects or activities impacted by the pause. This includes legally required programmatic giving and deadlines for fund distribution. In the meantime, all NOFOs are also on pause.
While this is the most all-encompassing pause since President Trump was inaugurated last week, agencies have been pausing programs and waiting for approval to resume grant-giving since last Monday. The memo grants exemptions on a case-by-case basis.
What comes next?
Program Reviews & Potential Cuts: Federal agencies will evaluate which programs align with administration policies and which might be scaled back or eliminated. Funding recipients should prepare for potential disruptions.
Increased Political Oversight: Each federal financial assistance program will be assigned a senior political appointee to oversee compliance with administration directives.
Rescinding & Modifying Awards: Pending grant opportunities could be modified or withdrawn. Even existing awards may be subject to cancellation if deemed inconsistent with administration priorities.
Legal & Congressional Pushback: Given the breadth of the changes, legal challenges and congressional scrutiny are likely. Organizations that rely on federal funding will be closely monitoring potential avenues for legal recourse. Democrats are already fighting this decision. Democratic appropriators sent a letter to OMB, which is certain to be the first of many, urging the administration to release funds. Expect lawsuits within the next few days.
Organizations, states, and local governments that depend on federal grants should assess their funding streams and prepare contingency plans. Programs focused on DEI, climate change, and foreign aid face heightened uncertainty. Reach out to Brumidi Group if you have any questions or would like to talk further about what can be done to release these funds.
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