January 27, 2025

OMB directive freezes grants with diversity or climate provisions

Federal aid frozen for programs supporting diversity, climate, and immigration

📋Public Policy📜Constitutional Law🏛️Government

On Jan. 27, 2025, Acting OMB Director Matthew Vaeth issued a memorandum directing all federal agencies to pause the obligation or disbursement of federal financial assistance, effective Jan. 28, 2025, at 5 p.m. ET (Holland & Knight Federal Pause Analysis).

Minutes before the Jan. 28, 2025, 5 p.m. ET deadline, U.S. District Judge Loren L. AliKhan temporarily blocked the assistance-pause order to maintain the status quo pending further litigation (Holland & Knight Court Intervention).

The Jan. 27 memorandum excludes direct-benefit programs—Social Security, Medicare, Medicaid, student loans and SNAP benefits—and defines federal financial assistance to encompass grants, loans, loan guarantees and cooperative agreements (Holland & Knight Program Exclusions; Assistance Definition).

📋Public Policy📜Constitutional Law🏛️Government

Test Your Knowledge

On what date did the Trump administration issue a memorandum pausing federal financial assistance?

Trump aims to end taxpayer benefits for immigrants without legal status.

What federal program specifically mentioned being exempt from the assistance pause?

Agencies can continue taking administrative actions not related to the targeted executive orders.

What new federal employee category did Trump create to increase accountability?

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People, bills, and sources

Russell Vought

White House Budget Office Director

U.S. District Judge Loren L. AliKhan

issued a temporary block on the implementation of the Jan. 27 pause memorandum.

What you can do

Access the Jan. 27, 2025 memorandum at https://www.hklaw.com/en/insights/publications/2025/01/trump-administration-pauses-federal-financial-assistance to identify which grants, loans or cooperative agreements are paused or exempt, then compile and submit project-specific data to OMB by Feb. 10, 2025, per the reporting requirement.

Federal employees should review the Schedule Policy/Career fact sheet at https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-creates-new-federal-employee-category-to-enhance-accountability/ and, if their position is reclassified, contact their agency’s Office of Human Resources to understand the shift to at-will status and updated removal procedures.

SNAP beneficiaries can confirm that SNAP remains exempt by visiting the USDA Food and Nutrition Service page at https://www.fns.usda.gov/snap, and student loan holders can verify exclusion of federal student loans at https://studentaid.gov.