On Monday night, the Trump administration released a memo calling for federal agencies to “pause” enormous swaths of federal spending for the purpose of aligning federal spending with the president’s policies and priorities.* The memo singled out federal grants, loans, and financial assistance that cover important functions such as housing, nutrition, and education. While the order exempts Medicare and Social Security benefits as well as payments directly to individuals, it would effectively shut down large portions of the government and endanger programs that millions of Americans rely on.
This morning, the White House’s Office of Management and Budget (OMB) sent internal guidance to the various agencies that included a list of more than 2,000 programs to be paused. However, hours later, in a public-facing document, the White House seemed to walk back the entire memo, saying it did not include any of the various programs its internal communication said it had or that the memo yesterday implied it had. Instead, the White House said the new action would not go beyond the scope of its day one executive actions, despite the Monday memo highlighting a third of the budget as being impacted. Because of the contradictory internal and external communication, it is unclear what the White House intends.
Late Tuesday, a federal judge ordered the Trump administration to halt its proposed action.
If the administration had been able to go forward with its initial instruction, some child care facilities would be defunded and may have had to close as early as next week.
Constitutional scholar Steve Vladeck observed that this pause “constitutes both unconstitutional and unlawful ‘impoundment’” and would be unlikely to win over even the extreme majority on the Supreme Court. It is likely an illegal deferral, potentially in violation of various spending and authorization laws, as well as the Impoundment Control Act (ICA) of 1974. The ICA created limited legal paths to impound funding. Under the ICA, if a president wishes to pause spending—for example, to plan for contingencies—there are two legal paths to do so: Sections 1012 and 1013. Section 1012 of the ICA applies if the president is looking to propose to rescind unobligated funding. Section 1013 is used if the president is looking to defer but not pare back unobligated funding. However, the special procedures in Section 1013 permit temporary pauses, known as “deferrals,” for extremely limited purposes during the fiscal year. This section prohibits deferrals for any other purpose, including for policy reasons.**
In its decision on Trump’s illegal 2019 impoundment of funding for Ukraine, the Government Accountability Office (GAO), which is tasked with adjudicating violations of the ICA, said, “The ICA does not permit deferrals for policy reasons.” President Donald Trump also did not submit a special message to Congress requesting a deferral—a requirement under Section 1013 of the Impoundment Control Act.
While the external OMB statement issued today called to exempt numerous programs, internal guidance from OMB to the agencies leaked Tuesday morning named thousands of programs that agencies were to review, including:
- Head Start: Provides funding to local organizations to run free comprehensive preschool and early learning programs for low-income families, with annual funded enrollment of more than 778,000 young children and their families.
- Farm to School Grant Program: Connects local farmers with child nutrition programs to allow schools to provide fresh foods for students directly from their communities.
- Nonprofit Security Grant Program: Provides security enhancements to nonprofits, including faith-based organizations, to help mitigate risks of violent attacks or hate-based crimes.
- Section 8 housing: Provides rental assistance to more than 4 million households (7.3 million people) through both vouchers and direct subsidy to properties.
- Children’s Health Insurance Program (CHIP): Provides funding to states for comprehensive coverage of 7.2 million children and pregnant women who earn too much to qualify for Medicaid but cannot afford private insurance.
- The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): Provides nutrition assistance for 1.5 million infants, 1.6 million new mothers, and 3.8 million very young children.
- Supplemental Nutrition Assistance Program (SNAP): Provides funds to help buy groceries for 42.6 million Americans.
- Title I education grants: Provides funding to more than 50,000 elementary and secondary public schools in low-income neighborhoods where the educational needs are greater.
- IDEA special education and rehabilitation services grants: Provides funding to states to help 7.5 million school-age children and 800,000 adults with disabilities obtain education and employment.
- Child nutrition programs (including the National School Lunch Program): The National School Lunch Program provides funding to states to provide free or low-cost meals to nearly 30 million children on average each day.
- Child Care and Development Block Grant (CCDBG): Provides funding to states to help low-income families afford child care, serving more than 1.3 million children every month.
- Community Health Center Program: Helps keep the doors open for more than 1,300 community health centers serving over 31 million patients across the country each year. Federal grants make up 11 percent of the total revenue for community health centers.
In addition, Illinois and other states found themselves frozen out of portals for Medicaid. Medicaid provides matching funds to states for health insurance, helping nearly 1 in 5 Americans, including low-income individuals, pregnant women, seniors, and people with disabilities.
Disbursement timing for federal programs varies, and payments are typically made annually, quarterly, or monthly. In most cases, grant program disbursements are made when grantees seek to draw down the grant award after incurring eligible expenses. Any program that misses payments would be threatened, just like in a federal shutdown.
It is worth noting that a broad pause would be acutely felt by families who are using Section 8 rental assistance and some Head Start facilities due to the timing of upcoming payments. For Section 8, housing authorities receive monthly federal payments. While some have limited cash reserves, some do not. This lapse would potentially threaten some household’s rental assistance in the middle of winter. For Head Start, any facility whose annual grants would have normally been received on February 1 would likely have been impacted under the proposal, potentially shuttering some preschool and early learning facilities across the country.
Learn more about the state-by-state impacts of a funding pause
Conclusion
The Trump administration’s proposal appears to be an illegal use of impoundment and is one of the many tools that the president is already wielding to eliminate important checks and balances in our government and put in place the radical agenda outlined in Project 2025 that would hurt, not help, American families.
A pause of funds for critical public services would gravely threaten Americans’ well-being. While the action has been stayed temporarily and courts are eventually likely to ultimately find this action illegal, even if this proposal never goes forward, it shows the administration’s willingness to pausing various funds and put Americans’ well-being at risk.
The author would like to thank extend enormous thanks to Andrea Ducas, Ben Olinsky, Brendan Duke, Casey Peeks, Doug Turner, Emily Gee, Jessica Vela, Joe Radosevich, Kennedy Andara, Kevin DeGood, Kyle Ross, Lily Roberts, Marquisha Johns, Mia Ives-Rublee, Michael Sozan, Mimla Wardak, Natasha Murphy, Sophie Cohen, and Weade James for their help.
*Author’s note: The OMB memorandum states this in several places, including as follows: “Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities. Financial assistance should be dedicated to advancing Administration priorities …”; “This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.”; “This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.”; and “[A]gencies must, for each Federal financial assistance program: (i) assign responsibility and oversight to a senior political appointee to ensure Federal financial assistance conforms to Administration priorities.”
**Author’s note: There are three justifiable reasons to pause funding: to provide for contingencies; to achieve savings through changes in requirements or greater efficiency; or if the law specifically allows for a pause. The OMB memo states, the purpose is to align Federal financial assistance with “presidential policies” and “the President’s priorities”, i.e., for policy reasons. This is not one of the three acceptable reasons.