Late Monday, January 27, the Trump Administration, via the Office of Management and Budget (OMB), issued a memorandum to temporarily halt federal financial assistance pending a review of how the funding aligns with Presidential priorities.  

The memo, sent with the subject line: “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs” and signed by Mathew Vaeth, Acting Director, Office of Management and Budget, requires federal agencies, including the Departments of Housing and Urban Development (HUD), Health and Human Services (HHS), Veterans Affairs (VA), State, and Labor, among others, to identify and review all federal financial assistance programs and supporting activities to be consistent with the President’s policies and requirements.  

While the memo states that the freeze will start at 5 p.m. on January 28, a federal judge temporarily blocked the funding pause from going effect until February 3, at which point the judge will make a more permanent decision, according to reports. 

The OMB memo’s initial target date for agencies to submit program review to the Office of Management and Budget (OMB) is February 10.  

According to the memo, “financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.” 

The memo then references a series of executive orders issued by the President as examples for how federal funds should be used to support the American people. 

Federal financial assistance, according to the Code of Federal Regulations, is defined as “assistance that recipients or subrecipients receive or administer in the form of grants, cooperative agreements, non-cash contributions or donations of property (including donated surplus property), direct appropriations, food commodities, and other financial assistance.” Federal financial assistance also includes “assistance that recipients or subrecipients receive or administer in the form of loans, loan guarantees, interest subsidies, and insurance.” 

Federal financial assistance does not include amounts received as reimbursement for services rendered to individuals. A January 28 OMB-issued “Frequently Asked Questions” clearly states that Medicare and Social Security benefits are not impacted and that Medicaid, Supplemental Nutritional Assistance Payments (SNAP), rental assistance, and similar “direct assistance” programs will continue without pause.  

However, several LeadingAge members report being locked out of their HUD financial access systems beginning early on January 28. Similarly, lawmakers, including Senate Finance Committee Ranking Member Wyden (D-OR), shared reports that State Medicaid portals are not functioning properly, deepening the confusion around the memo. 

The full scope of the executive order is still unclear. LeadingAge has reached out to contacts within HUD, the VA, and HHS, as well as members of Congress, to assess the impact on older adults served by LeadingAge members. HUD has stated that the executive order is under review by HUD’s lawyers, but that rental assistance payments will continue. We are still awaiting responses from other agencies. 

Next Steps for Freezing Federal Financial Assistance 

On January 28, OMB sent additional instructions directing federal agencies to review funding as it relates to diversity equity, inclusion, and accessibility (DEIA), environmental justice, equity-related grants, “gender ideology,” immigration, abortion access, and more. (Note: while every federal agency’s funding programs are included on the list, not all programs will be included in the pause.) The instructions state that the information requested must be provided for any program that has funding or activities planned through March 15; after that, the timeline for OMB’s review and decision-making is unclear.  

In the meantime, agencies must pause issuance of new awards and disbursement of federal funds under all open awards, as well as other relevant agency actions implicated by the executive orders. This could impact affordable housing subsidies provided through HUD, as well as older adult programs funded through the Older Americans Act (OAA), such as health and nutrition programming, and Veterans Funding for both health and housing.  

Agencies are also required to assign oversight of federal financial assistance to a senior political appointee to ensure the assistance conforms with administration priorities. Agencies should review currently pending federal financial assistance announcements to modify unpublished announcements or withdraw announcements already published. To the extent lawful, agencies are also directed to cancel awards that conflict with Administration priorities.  

Take Action! 

Let Congress know how the pause in federal funding will impact your communities and your ability to serve older adults here—and request an end to the freeze immediately.

Additional information and analysis

Find further analysis of the January 27 directive, including impact by care setting and community type, and keep up with the latest via our OMB Memo: Temporary Pause on Federal Financial Assistance Programs serial post.