A federal judge on Tuesday blocked the Trump administration from implementing a new freeze on grants, loans and other financial assistance payments after a coalition of nonprofits sued to challenge a White House order that was set to take effect at 5 p.m.
District Judge Loren L. AliKhan blocked the pause on federal payments until at least Monday, February 3, after a day filled with confusion, disruption and alarm over the potential scope of the Trump move and its implications.
In a two-page memo issued Monday night, the White House ordered the temporary freeze on federal financial assistance, including grants, loans and foreign aid. The vaguely worded directive immediately prompted panic about what programs and groups would be affected and sparked a furious backlash, with Democrats and advocacy groups warning that the abrupt pause was illegal and would have dire effects.
“This order is a potential five-alarm fire for nonprofit organizations and the people and communities they serve,” National Council of Nonprofits President and CEO Diane Yentel 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.”
The National Council of Nonprofits and the American Public Health Association were among the groups filing the lawsuit.
Pushing Trump’s priorities: The White House memo, from Matthew J. Vaeth, acting director of the Office of Management and Budget, said that the funding pause is meant to give the new administration time to “review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.”
Trump and his supporters say that elections have consequences and that voters gave this president a strong mandate to enact his agenda and eradicate any and all examples of woke ideology from the federal government. While the details of the intended pause are unclear, some targets were laid out explicitly in the memo:
“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. 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 wrote that agencies should submit “detailed information” by February 10 on programs and activities affected by the freeze, and OMB reportedly sent agencies questions about more than 2,600 programs, including ones providing school meals for low-income students and nutrition for pregnant women and infants. The budget office asked agencies to analyze whether their programs complied with Trump’s recently signed executive orders targeting environmental policies, “gender ideology,” or diversity, equity and inclusion mandates. Footnotes in Monday’s memo clarified that “assistance provided directly to individuals” should not be affected and added: “Nothing in this memo should be construed to impact Medicare or Social Security benefits.”
Widespread confusion: It wasn’t immediately clear, though, how broad the impact would be. “This is not a blanket pause on federal assistance and grant programs from the Trump administration,” White House press secretary Karoline Leavitt told reporters at her first news briefing. “If you are receiving individual assistance from the federal government, you will still continue to receive that. However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars.”
The confusion reportedly led the White House budget office to issue another memo on Tuesday afternoon to clarify that programs including Medicaid, food stamps, Pell Grants, Head Start, small business assistance and rental assistance would be exempted. Still, states reported during the day that they were locked out of Medicaid payment portals and nonprofits said that they could not get into the systems they use to access federal funds they had been granted.
Dems claim crisis: Democrats said the order is a blatant violation of the law that creates a constitutional crisis. “Congress approved these investments and they are not optional, they are the law,” Democratic Senate Minority Leader Chuck Schumer said in a social media post. “These grants help communities in red states and blue states and support families, help parents raise kids, and lead to stronger communities.”
In a letter to Vaeth, Sen. Patty Murray and Rep. Rosa DeLauro, the top Democratic appropriators, said they were alarmed by the administration’s “efforts to undermine Congress’s power of the purse, threaten our national security, and deny resources for states, localities, American families, and businesses.” They warned that the OMB order “is breathtaking, unprecedented, and will have devastating consequences across the country.”
Democratic state attorneys general planned another legal challenge to the order. “This action takes the power of the purse away from Congress, violates the separation of powers, and is already causing massive harm in Colorado, undermining delivery of healthcare, education, and public safety,” Colorado Attorney General Phil Weiser said in a press release. “This government funding shutdown is illegal and must be stopped by the courts. That is why I will join other state attorneys general in filing a lawsuit to do just that.”
What it all means: The OMB freeze will now be tied up in court, at least temporarily. While the specifics of the order, its breadth and its timing may have come as a chaotic surprise, Trump and his allies had plainly telegraphed their intention to challenge Congress’s power of the purse and test legal limits on the president’s authority to slash spending that doesn’t align with his agenda.