Donald Trump ordered a sweeping clampdown on government spending within days of entering the White House.
An internal memorandum sent on Monday by the Office of Management and Budget ordered federal agencies to pause all grants and loans that have already been approved by the government. Some people are concerned about whether that means Social Security and other vital payments will be blocked.
Federal agencies “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance,” White House Office of Management and Budget acting director Matthew Vaeth said in the memorandum seen by Newsweek.
Why It Matters
Social Security benefits are a vital source of income for tens of millions of Americans. An estimated 53 million retirees—roughly 16 percent of the population—were collecting monthly payments at the end of 2024.
Donald Trump in Miami, Florida, on January 27, 2025. Donald Trump in Miami, Florida, on January 27, 2025. GETTY
Is Social Security Impacted by the Federal Grants Pause?
No—the memo specifically outlines that nothing “should be construed to impact Medicare or Social Security benefits,” nor does it include “assistance provided directly to individuals.” Benefits provided by the Social Security administration, including retirement, survivor and disability benefits, will be paid as usual.
However, the fate of funding for other government programs remains unclear. The new order may impact billions of dollars in funding allocated to state and local governments. The federal government funds thousands of programs, including research projects, housing subsidies and educational grants.
Newsweek contacted the White House and the Office of Management and Budget via email for clarification on which agencies and programs will be impacted.
“This is not a blanket pause on federal assistance and grant programs from the Trump administration,” Trump press secretary Karoline Leavitt said in her first White House briefing on Monday.
She noted that every agency has the opportunity to present its case to the administration for maintaining its funding.
“If they feel that programs are necessary and in line with the president’s agenda, then the Office of Management and Budget will review those policies,” she said.
What People Are Saying
Senate Minority Leader Chuck Schumer said on Monday: “They say this is only temporary, but no one should believe that. Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people. Congress approved these investments and they are not optional; they are the law.”
House Minority Leader Hakeem Jeffries said in a letter on Tuesday: “Millions of Americans will be hurt. By necessity, we will combat the extreme funding freeze with a forceful response on all fronts.”
Harris County, Texas, attorney Christian D. Menefee said in an email to Newsweek: “President Trump does not have the power to withhold funds that Congress has already approved. Both the U.S. Constitution and federal law are clear on that.”
What’s Next
A federal judge has temporarily blocked the Trump administration’s order. The temporary hold placed by U.S. District Judge Loren L. AliKhan stops the administration from implementing its decision until at least 5 p.m. ET on February 3.
