Trump Stops All Federal Subsidies to Avoid Waste

Trump Stops All Federal Subsidies to Avoid Waste
Trump Stops All Federal Subsidies to Avoid Waste

Trump’s executive order to stop all federal grants and loans is considered “unbelievable, unprecedented and will have devastating consequences across the United States”…

In a sweeping and unprecedented move, President Donald Trump has signed an executive order halting all federal grants and loans, a decision that experts warn could have far-reaching consequences across the United States. This measure, which took effect on January 28, is part of the Trump administration’s broader effort to overhaul federal spending and eliminate what it deems as wasteful expenditures.

The White House directive mandates a freeze on all federal grants and loans to allow the government to reassess their alignment with the president’s priorities. According to Matthew Vaeth, acting director of the Office of Management and Budget (OMB), the administration is determined to ensure that federal resources are not used in ways that contradict Trump’s policy agenda. “Utilizing taxpayer dollars for initiatives that do not contribute to improving Americans’ daily lives is an inefficient use of resources,” Vaeth stated in the memorandum issued on January 28.

The freeze extends beyond domestic programs to include foreign aid and payments to nongovernmental organizations. However, essential social welfare programs such as Social Security, Medicare, and direct payments to individuals remain unaffected. It is yet unclear, however, how this suspension will impact healthcare benefits for veterans and low-income citizens.

According to the OMB memo, the U.S. government spent nearly $10 trillion in the 2024 fiscal year, with over $3 trillion allocated to grants and loans. However, the Congressional Budget Office (CBO) estimates last year’s federal spending at approximately $6.75 trillion, raising questions about the discrepancy in figures.

Trump’s move is the latest in a series of sweeping changes aimed at restructuring federal operations. Since taking office on January 20, he has also halted gender diversity programs, frozen the hiring of civil servants, ordered overseas national security personnel to return home, and sought to eliminate job protections for thousands of government employees.

The OMB directive requires federal agencies to submit detailed reports by February 10 on the programs affected by the funding suspension. The order has sparked strong reactions from various sectors, particularly nonprofits and social organizations that rely on federal funding.

“This decision is equivalent to a catastrophic natural disaster for nonprofits and the communities they serve,” said Diane Yentel, president and CEO of the National Council of Nonprofits. “From halting critical medical research to disrupting food assistance, domestic violence prevention programs, and suicide helplines, even a temporary pause in funding could have life-threatening consequences.”

Democratic lawmakers have strongly opposed the move, labeling it “illegal and reckless.” Senator Patty Murray and Representative Rose DeLauro, both members of the Congressional Budget Committee, called on the administration to uphold the Constitution and ensure that federal funds are allocated as intended by Congress. Senate Democratic Leader Chuck Schumer warned that the measure could have devastating economic effects, stating, “This order will cost Americans their jobs, disrupt higher education institutions, halt disaster relief programs, and impact senior citizen and food assistance initiatives.”

Republicans, on the other hand, argue that Trump is merely following through on his campaign pledge to cut wasteful government spending. “This is exactly what he was elected to do—challenge the status quo and ensure that taxpayer dollars are used responsibly,” said Republican Congressman Tom Emmer during a policy event in Miami, Florida.

As the deadline for federal agencies to submit their reports approaches, uncertainty looms over how long the suspension will last and what long-term impact it may have on federal programs and services nationwide. For now, millions of Americans await further clarification on what this executive order means for their livelihoods and the programs they rely on.

 

From : News
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