WASHINGTON — A federal judge on Tuesday temporarily blocked a push from President Donald Trump to pause federal funding while his administration conducts an across-the-board ideological review to uproot progressive initiatives.
The Trump administration plan plunged the U.S. government — and states and organizations that rely on federal funding — into panic and confusion and set the stage for a constitutional clash over control of taxpayer money.
The order from U.S. District Judge Loren L. AliKhan came minutes before the funding freeze was scheduled to go into effect. The administrative stay, prompted by a lawsuit brought by nonprofit groups, lasts until Monday afternoon and applies only to existing programs.
What You Need To Know
- A federal judge has temporarily blocked a Trump administration freeze on federal grants and loans that could total trillions of dollars
- U.S. District Judge Loren L. AliKhan blocked the action Tuesday afternoon, minutes before it was set to go into effect
- The administrative stay pauses the freeze until Monday
- The White House had planned to start the pause as they begin an across-the-board ideological review of federal spending
- The plan sparked confusion and panic among organizations that rely on Washington for their financial lifeline
- Administration officials have said federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships
Administration officials said the decision to halt loans and grants — a financial lifeline for local governments, schools and nonprofits — was necessary to ensure that spending complies with Trump’s recent blitz of executive orders. The Republican president wants to increase fossil fuel production, remove protections for transgender people and end diversity, equity and inclusion efforts.
But a vaguely worded memo issued by the Office of Management and Budget, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services.
"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," said a memo from Matthew Vaeth, the acting OMB director, sent out on Monday.
Democrats and independent organizations swiftly criticized the administration, describing its actions as capricious and illegal because Congress had already authorized the funding.
"More lawlessness and chaos in America as Donald Trump's Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country," said a statement from Senate Minority Leader Chuck Schumer, a Democrat from New York. "If this continues, the American people will pay an awful price."
AliKhan, who was appointed by President Joe Biden, said in halting the freeze, “It seems like the federal government currently doesn’t actually know the full extent of the programs that are going to be subject to the pause."
Jessica Morton, an attorney for the National Council of Nonprofits which brought the suit, said the group has tens of thousands of members around the country that could be affected.
“Our client members have reported being extremely concerned about having to shutter if there’s even a brief pause,” Morton said.
Justice Department attorney Daniel Schwei said the plaintiffs hadn’t identified anyone specifically who would lose funding right away if the pause does go into effect.
Democrats have described the Trump administration’s decision as capricious and illegal. They argued that the president had no right to unilaterally stop spending money appropriated by Congress.
Just minutes after AliKhan ruled, Democratic attorneys general from 22 states and the District of Columbia filed their own lawsuit seeking to block and permanently prevent the administration from cutting off federal funding.
“There is no question this policy is reckless, dangerous, illegal and unconstitutional,” New York Attorney General Letitia James said.
The pause was set to take effect at 5 p.m. ET on Tuesday, and it's unclear from the memo how sweeping it will be. Vaeth said that all spending must comply with Trump's executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.
Vaeth wrote that "each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President's executive orders."
White House press secretary Karoline Leavitt, who faced a slew of questions on the memo during Tuesday’s briefing, sought to stress that the new directive was not a permanent ban. Instead, she referred to it as a “temporary pause or freeze” until it can be determined whether the funding fits with Trump’s priorities. She told reporters she would let them know when the Office of Management and Budget decides what funding will continue to go out the door.
“We've seen the Biden administration spend money like drunken sailors,” Leavitt said. “It's a big reason we've had an inflation crisis in this country, and it's incumbent upon this administration to make sure, again, that every penny is being accounted for honestly.”
She added that she spoke with the nominee for OMB director, Russell Vought, who has yet to be confirmed by the Senate, earlier Tuesday and his door is open for federal agencies to make the case for their programs being “necessary and in line with the president’s agenda.”
Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they will be affected.
The pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he's reaching deep into the bureaucracy.
"They are pushing the president's agenda from the bottom up," said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.
He also said there are risks in Trump's approach, especially with so many voters reliant on Washington.
"You can't just hassle, hassle, hassle. You've got to deliver."
Medicare and Social Security benefits will be unaffected by the pause, according to the memo. But there was no explanation of whether the pause would affect Medicaid, food stamps, disaster assistance and other programs. The memo said it should be implemented "to the extent permissible under applicable law."
During the White House briefing, Leavitt repeatedly insisted that assistance going “directly to individuals” will not be impacted, naming Social Security benefits, Medicare benefits, food stamps and welfare benefits in particular. However, it is not fully clear what constitutes direct individual assistance and Leavitt did not fully answer several questions asking for clarification. When asked directly if the freeze would impact Meals on Wheels, Head Start or disaster aid, she repeated that “it does not affect individual assistance that’s going to Americans.”
In a post on X following the briefing, Leavitt acknowledged that there was an outage with the government's Medicaid website portal but said it is expected to be back online "shortly."
"We have confirmed no payments have been affected — they are still being processed and sent," she wrote in the post.
"Are you stopping NIH cancer trials?" Sen. Amy Klobuchar, a Democrat from Minnesota, wrote on social media, referring to the National Institutes of Health.
Sen. Patty Murray of Washington and Rep. Rose DeLauro of Connecticut, the top Democrats on the Senate and House appropriations committees, expressed "extreme alarm" in a letter to Vaeth.
"This Administration's actions will have far-reaching consequences for nearly all federal programs and activities, putting the financial security of our families, our national security, and the success of our country at risk," they wrote.