At the end of January 2025, former President Donald Trump gave out an executive order that helped to regulate an immediate break on federal grants and loans to guarantee the president’s policy setting out the administration of the unified state. This significant practice has disturbed the normal operation of several sectors, denoting, for instance, affecting the program in the health and education sectors and international aid.

Trump Funding Freeze: Its Impact on Domestic and International Programs

Eras of U.S. democracy promotion overseas have been considerably damaged by the freezing of funds. Individuals such as the National Endowment for Democracy (NED) had to suspend grants in more than 100 countries, causing absences, and the shutting down of branches. Those actions raised concerns among human rights activists, who argued that the freeze was advantageous to authoritarian governments as it stops programs designed to build up democratic institutions in the world.

At home, the halt has been a threat to the life of critical medical research funding. In Michigan, Attorney General Dana Nessel went to court and got a temporary order against the administration’s decision to cut “indirect cost” compensation, which are crucial to university research projects. The prospective cuts would have been responsible for reducing more than $200 million in funding for universities like the University of Michigan and Michigan State University, thus influencing research on prostate cancer, epilepsy, and PTSD treatment.

International aid operations have been negatively impacted. The decrease in USAID funds by the government will force aid organizations to withhold payments of a few hundred million dollars in contracts to Gaza. This sudden break could be the reason for the reversal of the progress made during the ceasefire between Israel and Hamas and the actual breakage of the truce. Although an amount of more than $383 million was allocated for Gaza on January 31, not one single cent has been transferred to the aid partners, which in turn has led to layoffs and operations of a lower scale.

The government shelters the freeze as being necessary to review programs and ensure they conform with the president’s plan of America First. But, the opposition argues that the action taken is contrary to the Congress’s power according to the Constitution, which is to allow federal expenditures. Legal proceedings are in place with federal judges in Rhode Island and Washington, D.C., passing initial restraints to put on hold the budget ban, to make the point about the necessity of preserving public services and upholding the separation of powers.

Currently as the situation moves, the specific impacts of the freeze remain unclear. The administration’s actions have given room for a larger discussion about the concentration of power between the executive and Congress in determining how federal spending should be.