The White House budget office has issued a directive to halt all federal grants and loans, as outlined in an internal memorandum sent on Monday. This freeze mandates that federal agencies must temporarily suspend all activities related to the obligation or disbursement of federal financial assistance, including the issuance of new grants. The freeze is scheduled to commence at 5 p.m. ET on Tuesday.
The memorandum specifies that the pause applies to various agency activities, such as financial assistance for foreign aid, nongovernmental organizations, diversity, equity, and inclusion initiatives, gender ideology, and environmental programs like the Green New Deal. However, it clarifies that Social Security and Medicare benefits, as well as direct assistance to individuals, are not affected.
While individual assistance is not directly impacted, Senate Minority Leader Chuck Schumer expressed concerns that the freeze could jeopardize billions of dollars in community grants and financial aid that support millions of individuals nationwide.
Many organizations are currently uncertain about how they will be affected by the freeze. For instance, Meals on Wheels, a program that heavily relies on federal funding through the Older Americans Act Nutrition Programs, is concerned that the halt in grants could disrupt services for vulnerable seniors who depend on the program for meals.
Similarly, the Low Income Home Energy Assistance Program may face challenges in accessing funds for new heating assistance applications. Mark Wolfe, the executive director of the National Energy Assistance Directors Association, expressed uncertainty about the program's ability to serve new applicants during this freeze.
Universities are also assessing the potential impact of the freeze on their operations as they await further guidance on how the directive will affect their federal funding and grant programs.
