The White House budget office has ordered a pause in grants, loans and other federal financial assistance, according to a memo sent to government agencies on Monday, potentially paralysing a vast swathe of programmes and sowing confusion and alarm among the array of groups that depend on them.

The directive threatened to upend funds that course throughout the American economy: Hundreds of billions of dollars in grants to state, local and tribal governments. Disaster relief aid. Education and transportation funding. Loans to small businesses.

But the two-page memo from Matthew J. Vaeth, the acting director of the Office of Management and Budget, left the scope of the pause, and much else, unclear.

Among the uncertainties was whether President Trump has the authority to unilaterally halt funds allocated by Congress. Senator Chuck Schumer of New York, the Democratic leader in the Senate, said in a statement that the memo “blatantly disobeys the law”.

“Congress approved these investments and they are not optional, they are the law,” Schumer said, adding that “Donald Trump must direct his administration to reverse course immediately and the taxpayers’ money should be distributed to the people.”

In his memo, Vaeth directed federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance”, and any other programmes that included “DEI, woke gender ideology and the Green New Deal”.

“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,” Vaeth said.

It was not immediately clear what programmes would fall under those categories. The Green New Deal, for example, was a policy proposal that never became law.

The memo, which was reported earlier by the journalist Marisa Kabas, specifies that programmes that support non-governmental organisations would also be affected. Non-profit groups reacted with alarm.

“This order is a potential five-alarm fire for non-profit organisations and the people and communities they serve,” Diane Yentel, the chief executive of the National Council of Nonprofits, said in a statement.

“From pausing research on cures for childhood cancer to halting food assistance, safety from domestic violence and closing suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives,” she added. “This order could decimate thousands of organisations and leave neighbours without the services they need.”