What Does Trump’s Federal Funding Freeze Mean for People Who Get Aid?

A federal judge has temporarily blocked an effort by the Trump administration to pause federal payments for grants and other programs, suspending a plan that caused widespread confusion on Tuesday.

A White House memo ordering a broad freeze on federal grants and loans by 5 p.m. Tuesday has ordinary Americans who depend on such aid, as well as seasoned budget experts, scratching their heads.

The memo suspending the federal funding was vague in its wording, causing confusion within federal assistance programs, at nonprofits and among Americans receiving government aid. Adding to the whiplash, a federal judge on Tuesday temporarily blocked the freeze as she considers arguments from the U.S. government and the plaintiffs in the case.

“If this was being undertaken pursuant to the executive orders on [diversity, equity and inclusion], why would the administration issue such broad, unclear and confusing directions?” Tad DeHaven, a policy analyst focusing on economic and fiscal policy issues at the libertarian Cato Institute, told CBS MoneyWatch.

“I don’t really understand it, and I think even people who are in positions of power don’t really understand it,” added Wendy Edelberg, director of The Hamilton Project at Brookings, a liberal-leaning public policy research group.

The memo, from the U.S. Office of Management and Budget (OMB), indicated that Social Security and Medicare programs would be exempt from the suspension in federal funding. Additional guidance released Tuesday further specified that “any program that provides direct benefits to Americans is explicitly excluded from the pause.”

“In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause,” the updated guidance said.

The memo adds that funds for small businesses, farmers, Pell grants, Head Start, rental assistance and other similar programs are also exempt.

SNAP serves roughly 41 million low-income Americans.

The Older Americans Act Nutrition Program, a federal initiative that supports community-based senior nutrition programs like Meals on Wheels, could be affected by the proposed funding pause.

If the order includes the Older Americans Act, it “would halt service to millions of vulnerable seniors who have no other means of purchasing or preparing meals,” Meals on Wheels said in a statement to CBS MoneyWatch. “The lack of clarity is creating chaos for Meals on Wheels providers not knowing whether they should be serving meals today.”

The OMB memo added that rental assistance and other similar programs will not be paused. Still, the National Low Income Housing Coalition (NLIHC) expressed concern that Department of Housing and Urban Development programs could be covered by the freeze.

The federal funding freeze does not apply to student loans and Pell grants, according to the Department of Education. The funding pause “only applies to discretionary grants at the Department of Education,” DOE spokesperson Madi Biedermann said in a statement to CBS MoneyWatch.

The OMB memo also indicated that Head Start, a preschool program serving nearly 800,000 low-income children that receives federal health funds, is not impacted by the pause.

via: CBS News

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