Trump Sows Chaos With Spending Freeze Order

Trump on Monday (Reuters)
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening. President Donald Trump continues to brazenly test the boundaries of presidential power - or try to steamroll right through them. We've got the latest.

Judge Temporarily Blocks Trump's Surprise Spending Freeze

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.

Quote of the Day

"Some of this stuff has only been talked about at cocktail parties at the Heritage Foundation in jest. And they're actually doing it all."

− An unnamed Republican operative, speaking to NBC News about President Trump's flurry of executive actions over the last nine days. The operative said that Republicans had long dreamed of reducing the size and scope of the federal government, but Trump's effort to take on the entire conservative agenda all at once was "notable."

Vance Tells House GOP to Keep Democrats Out of Debt Ceiling Fix

Meeting behind closed doors with House Republicans at their policy retreat at Trump National Doral resort near Miami Tuesday, Vice President JD Vance told the assembled group that President Trump still wants to include a provision on the debt ceiling in the massive reconciliation package lawmakers hope to pass in a matter of weeks.

As Politico's Meredith Lee Hill reports, Vance said that addressing the debt ceiling through the reconciliation bill would allow Republicans to avoid negotiating with Democrats over the issue. In a reversal of their typical roles, Democratic leaders have indicated that they plan to demand a high price for cooperating with Republicans on an increase, suspension or perhaps even elimination of the debt limit.

Vance also advised the lawmakers to write the budget resolution that paves the way for the reconciliation bill with broad strokes, allowing the details to be filled in later. "Some Republicans took that as a directive to make the blueprint as vague as possible - targeting floors for spending cuts that can be altered later on in the process," Hill writes.

More broadly, Vance reportedly urged Republicans to stick together to deliver on Trump's agenda. Doing so may be easier said than done, however, given the divisions over fiscal matters within the GOP conference that could make it hard to agree on tax cuts that drive up the national debt, among other potentially sticky issues.

A pair of lawmakers highlighted that division when they stood up to criticize Republicans who did not attend the retreat. One of those non-attendees, Rep. Chip Roy of Texas, said he had better things to do than listening to "excuses" from his colleagues about why they were planning another increase in the debt. "I am in Texas, with my family & meeting with constituents, rather than spending $2K to hear more excuses for increasing deficits & not being in DC to deliver Trump's border security [funding] ASAP," he said on social media.

Back in Florida, Rep. Dusty Johnson of South Dakota predicted that the path ahead for the GOP will be rocky. "It is going to be a difficult next few weeks," he said.

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