Trump's Funding Pause Is Not ‘Across-the-Board' Freeze, White House Says
(Bloomberg) -- President Donald Trump's administration rushed to clarify a memo pausing federal grants, loans, and financial assistance, saying that the instructions from the White House budget office were not intended as an 'across-the-board' freeze.
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'It is expressly limited to programs, projects, and activities implicated by the President's Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest,' the White House budget office said in a new document on Tuesday.
White House Press Secretary Karoline Leavitt said the directive would not affect 'individual assistance,' such as Social Security, Medicare, food stamps and welfare.
'If you're receiving individual assistance from the federal government, you will still continue to receive that,' Leavitt told reporters. 'Direct assistance will not be impacted.'
The original document, issued by acting Office of Management and Budget director Matthew Vaeth, fanned immediate concern that education, health care, poverty programs and disaster relief could all be held up by the freeze, which ordered officials to identify and review 'all federal financial assistance programs and supporting activities' to make sure they were 'consistent with the president's policies and requirements.'
The missive earned quick bipartisan criticism on Capitol Hill and consternation across Washington, with officials saying the sweeping guidance could imperil critical programs.
But in the new memo, the White House said that the freeze should not be applied to programs like Medicaid and food assistance that are funded through block grants to state and local governments which handle distribution.
'Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused,' the fresh memo said. 'If agencies are concerned that these programs may implicate the President's Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.'
The latest OMB guidance also says that Trump's administration is not attempting to impound funds appropriated by Congress. Some of the president's allies have argued that Trump should attempt to cut government spending by simply not distributing funds.
'It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President's Executive Orders, to the extent permitted by law,' the memo said.
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