In a significant move that exceeds the impact of numerous executive orders signed by President Donald Trump in his first week in office, the Office of Management and Budget has instructed agencies to pause all federal grants. This suspension allows the administration to evaluate which programs align with the President’s goals.

The acting director of the Office of Management and Budget issued a memo on Monday, causing concern in Washington regarding which federal programs will remain operational.

Details regarding the order are limited. Here’s what we currently know.

When will this take place?

According to the memo, the pause will begin on Tuesday at 5 p.m.

What will be impacted?

The memo cites a legal definition of federal financial assistance, which encompasses grants, cooperative agreements, surplus donations, loans, and interest subsidies. However, it does not include aid received directly by individuals, such as Medicare and Social Security benefits.

The memo references an executive order signed by Trump on January 20, which instructed department and agency leaders to “immediately pause” new programs and distribution of development aid to foreign nations. This pause was announced by the Department of State on Sunday.

For domestic programs, federal grants support a wide range of initiatives, from infrastructure projects to scientific studies. It remains unclear which specific categories will be impacted. The memo covers a broad scope that includes all federal financial assistance, but it also indicates that this can only apply to the extent allowed by current laws.

What are the next steps?

Agencies are directed to suspend new grants, the distribution of funds for open grants, and “other relevant agency actions… as permitted by law” that may fall under Trump’s various executive orders.

By February 10, agencies must provide reports outlining the programs affected by this pause.

Which agencies could be impacted?

The memo does not specify which agencies need to comply, but the Office of Management and Budget possesses significant authority over the executive branch, which includes nearly all federal agencies.

Over 25 agencies provide grants, including the Department of Education, the Department of Transportation, and the Department of Defense, as listed by Grants.gov.

What is the financial impact?

The memo does not indicate a specific total of funds that must be frozen immediately, but it does state that federal financial assistance reached $3 trillion in the fiscal year 2024.

What is the reasoning behind this order?

The memo explains, “Career and political appointees in the executive branch are responsible for ensuring federal spending and actions match the wishes of the American populace as articulated through presidential priorities.” It then outlines Trump’s goals, which include enhancing national security, discontinuing “wokeness,” and facilitating government efficiency.