Federal Funding Suspended: Impact on States, Universities, and Non-Profits Explained

States, schools, non-profits, and lawmakers are baffled by the White House's order issued Tuesday, which froze federal grants, loans, and other financial aid programs until the new administration could review them.

The White House issued a memorandum on Tuesday that halted federal grants, loans, and other financial aid programs until the new administration could evaluate them, leaving states, colleges, non-profits, and lawmakers perplexed.

A two-page White House memo is at the heart of this misunderstanding.

According to the memo, "Federal agencies must temporarily suspend all activities pertaining to the obligation or disbursement of federal financial assistance and other pertinent agency activities that may be impacted by executive orders, to the extent permitted by applicable law." This encompasses funding for international aid, non-governmental groups, the Green New Deal, awakened gender ideology, DEI (Diversity, Equity, and Inclusion), and more.

Additionally, it stated that President Donald Trump was endowed by voters with a "mandate to maximize the impact of every federal taxpayer dollar."

The memorandum further stated that financial support must be allocated to implementing the administration's agenda, making sure taxpayer dollars support a safer and stronger America, easing the financial burden of inflation on citizens, unleashing American manufacturing and energy, putting an end to 'wokeness' and the weaponization of government, encouraging efficiency in governance, and restoring America's health. "Using federal resources to advance Marxist equity, transgenderism, and the social engineering policies of the Green New Deal is a waste of taxpayer dollars and does not improve the daily lives of those we serve."

The University of Chicago's provost, Catherine Baeker, encouraged researchers to halt spending.

It further claimed that Americans had given President Donald Trump a "mandate to maximize the impact of every federal taxpayer dollar."

"During this uncertain time, we are asking all university researchers on federal grants to temporarily halt non-personnel expenses on federal grants," she wrote in a memo to staff. "For example, do not make additional expense commitments, purchase new supplies or equipment, start new experiments, travel on funded trips, etc." According to Baeker, university administrators were waiting for more direction. "I don't make requests like these lightly.

The research enterprise is essential to the everyday work of our teachers, researchers, staff, and students and is at the heart of our university's mission," she added. "I am also aware that you will have a lot of questions (as I do) and that this is not enough direction. I wish I had more details to offer now, but I'll keep you updated as we find out more. For the time being, we have to operate under the presumption that federal funds would not be available for grant expenditures made after today while this memorandum is in force.

Wisconsin Governor Tony Evers, a Democrat, wrote to Trump in response to the memorandum, requesting swift clarity on the order. "States are left to plan for the worst-case scenario with very little detail or explanation provided, almost no time for sufficient review or consideration, and no direct communication to date," Evers wrote. Millions of Americans, including Wisconsin ites, are perplexed by this extraordinary choice.

These expenditures and benefits, many of which the U.S. Congress surely authorized with bipartisan support, are now law. We should all agree that following the law is crucial, even though we may not agree on many other points.

According to U.S. Representative Tom Emmer, a Republican from Minnesota, Trump was carrying out his elected duties.

When you see stuff like this, you may initially think, "Well, this isn't how it's usually done," Emmer remarked. "But you need to understand, he was elected to shake up the status quo."

In a letter to Acting Office of Management and Budget Director Matthew Vought, House Appropriations Committee Ranking Member Rosa DeLauro, D-Conn., and Senate Appropriations Committee Vice Chair Patty Murray, D-Wash., warned of "devastating consequences." "The scope of what you are directing is staggering, unprecedented, and will have catastrophic consequences across the country," they stated. "We are writing to strongly urge you to uphold the law and the Constitution and ensure that all federal resources are distributed as required by law..

Spending will be suspended starting Tuesday at 5:00 PM. Information regarding any programs impacted by the suspension must be supplied by agencies by February 10th.

The White House letter may have far-reaching implications, particularly for non-profit groups, according to Diane Yentel, president and chief executive officer of the National Council of Nonprofits. For nonprofit organizations, as well as the individuals and communities they serve, this directive could be a five-alarm fire. "Even a small pause in funding could have devastating effects and cost lives, from stopping research on cures for childhood cancer to stopping food aid, protection from domestic violence, and shutting down suicide hotlines," she added in a statement. "This order could decimate thousands of organizations and deprive neighbors of the services they need."

Spending will be suspended starting Tuesday at 5:00 PM. Information regarding any programs impacted by the suspension must be submitted by agencies by February 10th.

The document read, "This temporary pause provides the administration time to review agency programs and determine the best use of funds for programs consistent with the law and the president’s priorities." "Federal agencies must promptly identify any legally required actions or deadlines for assistance programs that arise while the suspension remains in effect," it continued, even before finishing their comprehensive analysis. Federal agencies are required to submit an analysis of the need and this information to OMB. Additionally, OMB orders federal agencies to halt all operations associated with open [funding opportunity announcements], including holding merit review panels.