Protesters demanding change. Source: Bloomberg
The United States Office of Management and Budget (OMB), released a two-page internal memorandum on January 27th, calling for a temporary pause of all grants and loans that are disbursed by the federal government.
Matthew J. Vaeth, the acting director of the OMB, stated in the memo that “this memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.”
The memo has since caused widespread confusion and panic amongst millions of Americans who depend on federal funding for services such as: food, housing, healthcare, and education.
Furthermore, government aid programs, including Medicaid, experienced website outages and funding freezes across all 50 states shortly after the executive order was announced.
The website shutdowns only heightened concerns about the federal funding freeze itself, as some feared it signaled deeper, long-term issues with government assistance programs.
Karoline Leavitt, White House press secretary, attempted to clarify the confusion caused by the memo in a virtual hearing on January 28th.
Leavitt assured the public that “Social Security benefits, Medicare benefits, food stamps, welfare benefits, [and] assistance that is going directly to individuals will not be impacted by this pause.”
Furthermore, the OMB sent out an additional memo stating “funds for small businesses, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.”
However, programs and non-profits organizations focused on diversity, equity, and inclusion (DEI), gender and sexual identity, abortion access, climate change, and foreign aid are among those facing significant cuts.
Without federal support, these organizations face downsizing or even permanent closure, reducing aid to vulnerable communities that rely on their work.
Additionally, many faced disruptions to their payroll systems, resulting in employees going unpaid and forcing some organizations to reduce their services.
As a result, CNN journalist Karina Tsui reported that on January 28th, “Some non-profit groups, including the National Council of Nonprofits, filed suit in federal court in Washington, DC.”
In response to the lawsuit, U.S. District Judge Loren L. AliKhan ordered an administrative stay just hours before Trump’s executive order was set to take place.
This temporarily blocks the federal funding freeze from pausing payments on open awards already granted by the federal government.
Still, the administrative stay is expected to expire on Monday, February 3rd, at 5 pm.
The White House has since rescinded its initial OMB memo, which sparked the initial controversy.
Despite the memo rescission, the Trump administration has made it clear that the funding freeze will proceed as planned.
Leavitt stated on X that, “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s [executive orders] on federal funding will be rigorously implemented.”
The continued effort to withhold funds raises concerns as people see its impact on both those who depend on aid and those employed by these programs.
Myles Dunston, a VCAN student here at Norfolk State University expressed his frustration over what he sees as the Trump administration’s misplaced priorities.
He stated, “I will say I feel the current administration is targeting those they should be protecting and uplifting. They’re so focused on cutting funding from programs that show no harm to the American people and taking from the less fortunate and doing everything to coddle the rich. They show little to no concern for those who aren’t able to buy their way through life.”
Miles Dunston, like many others, is deeply concerned about the implications of the funding freeze, fearing it could be the first step toward widespread cuts to programs that support marginalized groups.
For now, the administrative stay issued by District Judge AliKhan, along with the pending lawsuits against Trump and his administration, has temporarily delayed the funding freeze process.
Nevertheless, the future of the government’s federal budget reform plans remains unclear.
Spartan Echo 