Trump administration memo announces abrupt freeze on broad swath of federal payments

by Jennifer Shutt, Georgia Recorder
January 28, 2025

WASHINGTON — The Trump administration will temporarily stop payments on multiple federal programs Tuesday evening, cutting off Americans who rely on what could be trillions in funding and likely setting off a legal challenge over Congress’ constitutional spending authority.

The two-page memo from the Office of Management and Budget announcing the freeze appeared to apply to all federal financial assistance, including grants and loans, though it wasn’t immediately clear which specific programs. A memo footnote said it should not be “construed to impact Medicare or Social Security benefits” but did not mention Medicaid.

“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,” the OMB memo states.

A separate memo from OMB lists off the programs that will be paused temporarily while it reviews which federal spending it deems appropriate.

The top Democrats on the U.S. House and Senate Appropriations committees sent a letter to acting OMB Director Matthew J. Vaeth, expressing alarm about how the stop in payments would affect people throughout the country and challenging the legality of the executive branch trying to overrule the legislative branch on spending decisions.

House Appropriations Committee ranking member Rosa DeLauro, D-Conn., and Senate Appropriations Committee ranking member Patty Murray, D-Wash., wrote that the scope of the halt in funding, which was approved by Congress on a bipartisan basis, “is breathtaking, unprecedented, and will have devastating consequences across the country.”

“While we may have strong policy disagreements, we should all be united in upholding our nation’s laws and the Constitution,” DeLauro and Murray wrote.

“We will be relentless in our work with members on both sides of the aisle and in both chambers to protect Congress’s power of the purse,” they added. “The law is the law—and we demand you in your role as Acting OMB Director reverse course to ensure requirements enacted into law are faithfully met and the nation’s spending laws are implemented as intended.”

Article I, Section 9, Clause 7 of the Constitution gives Congress the so-called “power of the purse” by granting it the authority to approve federal spending. 

Congress has passed several laws regarding that constitutional authority, including the 1974 Impoundment Control Act, which says that the president cannot simply refuse to spend money Congress has appropriated.

Trump’s pick for OMB Director, Russ Vought, has repeatedly called that law unconstitutional and said he believes the president does have the authority to simply ignore sections of spending law that have been passed by Congress and signed into law.

The Senate has yet to confirm Vought to the role of White House budget director, but is likely to do so in the weeks ahead.

Sharon Parrott, president of the Center on Budget and Policy Priorities, a left-leaning think tank, posted on social media that the OMB memo’s “vague and contradictory language makes it hard to know if funding is imperiled for public schools, community health centers, state and local law enforcement, veterans’ housing, health care through Medicaid, public services on tribal lands, etc.”

“This confusion & apparent withholding of funding isn’t a political game – real state, local, & tribal governments, school districts, nonprofits, & private charities delivering services we all depend on, funded with taxpayer dollars, can’t function without resources and clarity,” Parrott wrote. “Congress has enacted legislation that requires the Executive Branch to fund public services, and the Trump Administration seems determined to subvert Congress, its hand-waving about following the law notwithstanding.”

Parrott worked at OMB as associate director of the Education, Income Maintenance, and Labor Division, during then-President Barack Obama’s second term. 

Last updated 10:44 a.m., Jan. 28, 2025

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