President Donald Trump on Monday issued a sweeping memo ordering a halt to all grant, loan and other financial assistance programs disbursed by the federal government, a massive policy change that could affect a huge range of services across the country.
Matthew J. Vaeth, the acting director of the White House Office of Management and Budget, writes in the memo that federal agencies should temporarily pause grant and loan programs until Trump’s administration can ensure they are consistent with the president’s agenda, including bans on diversity, equity and inclusion initiatives, and limits on clean energy spending.
“The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal tax dollar,” Vaeth wrote. “The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
The memo states the order, which goes into effect Tuesday, does not affect Social Security or Medicare recipients and that financial assistance put on hold “does not include assistance provided directly to individuals,” according to The Washington Post.
Democrats warned that Trump’s latest directive could significantly harm programs used by millions of Americans, including food and rent assistance, early childhood programs, nonprofit organizations and children’s health insurance, among many others.
“They say this is only temporary, but no one should believe that,” Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement on Monday. “Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people.”
“These grants help people in red states and blue states, support families, help parents raise kids, and lead to stronger communities,” the senator added, warning the spending freeze will “mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities.”
Monday’s proclamation is only the latest Trump attempt to freeze federal government functions. Last week, Trump ordered government agencies to pause other funds appropriated by Congress — including key climate investments, money for infrastructure projects and nearly all U.S. assistance to foreign nations — challenging the constitutional role of Congress and its power of the purse.
And over the weekend, Trump fired at least 18 inspectors general whose job is to root out corruption in government agencies. He did it without notifying Congress, a move critics denounced as a “chilling purge.”
Trump’s executive orders are likely to face legal challenges, but his intention is not difficult to grasp: an unprecedented effort to seize power from a president far more unbound this time than during his first presidential term.
“This is what we were worried about ― some enormous, broad thing that would stop funding for huge swaths of the government that he simply doesn’t like and doesn’t agree with,” Bobby Kogan, senior director of federal budget policy at the liberal Center for American Progress, told HuffPost.
“He says he’s going after grants, loans and federal financial assistance, and he calls it three out of ten trillion dollars, so theoretically he’s pausing like a third of government funding ― which is illegal and massive,” Kogan added.
Trump and his allies have long opposed the Impoundment Control Act, which sets limits on how much a president can restrict money that’s been approved by Congress. This latest order may be designed to spark a legal battle and ensure the Impoundment Control Act is reviewed by the U.S. Supreme Court, where conservatives hold a 6-3 majority.
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“The Trump Administration is ostentatiously flouting Congress’s power of the purse, which is one of the most basic principles of our republic,” Samuel Bagenstos, a University of Michigan law professor and former general counsel at the Department of Health and Human Services under President Joe Biden, told HuffPost. “It’s almost like they’re daring people to sue them so they can challenge the constitutionality of the Impoundment Control Act and get the Supreme Court to decide the issue as soon as possible.”