Washington, Jan 29 (V7N) - The administration of U.S. President Donald Trump has ordered a freeze on all federal grants and loans. This decision could have negative effects on various programs, including education, healthcare, housing assistance, disaster relief, and more.

Reuters reports that on Monday, Matthew Veth, acting head of the Office of Management and Budget (OMB), signed an executive order outlining the freeze. The order states that the suspension is meant to align federal funding with the President’s policies. This follows a previous executive order by Trump last week, which canceled diversity, equity, and inclusion (DEI) programs.

Veth noted in the order that "using federal resources for policies that go against the President’s agenda is a waste of taxpayers' money and does not serve the public good." As a result, grants and loans for these policies have been suspended.

The order also mentions that the federal government spent nearly $10 trillion in the 2024 fiscal year, including over $3 trillion on grants and loans for financial assistance. However, the Congressional Budget Office (CBO) reported that the government’s spending for 2024 is about $6.75 trillion, highlighting discrepancies between the OMB’s and CBO’s estimates.

The suspension also applies to foreign aid and funding for non-governmental organizations (NGOs). However, individual assistance programs such as Social Security, healthcare funding, food aid, and disability benefits are excluded from the freeze.

The Trump administration’s move has sparked strong reactions from Democrats. Senators Patty Murray and Congresswoman Rosa DeLauro have called the decision "suffocating and unprecedented," accusing the administration of violating the Constitution by withholding congressionally approved funds.

Senate Democratic leader Chuck Schumer warned that if the suspension goes into effect, it could cause chaos for millions of Americans. Diane Yentel, head of the National Council of Nonprofits, stated that even a short-term freeze could halt critical programs, from cancer research for children to food assistance, domestic violence services, and suicide prevention hotlines.

On the other hand, top Republican representative Tom Emmer defended the move, saying that Trump is simply fulfilling his campaign promises.

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