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.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
WASHINGTON (AP) — President Donald Trump plunged the U.S. government into panic and confusion on Tuesday by pausing federal funding while his administration conducts an across-the-board ideological review to uproot progressive initiatives, setting the stage for a constitutional clash over control of taxpayer money.
Administration officials said the decision to halt loans and grants — a financial lifeline for local governments, schools and nonprofit organizations around the country — 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.
“This sort of came out of the blue,” said David Smith, a spokesperson for the Shawnee Mission School District in Kansas, one of countless districts that receives federal funding. Now they’re trying to figure out what it means “based on zero information.”
Trump administration officials said programs that provide direct assistance to Americans would not be affected, such as Medicare, Medicaid, Social Security, student loans and food stamps. They also defended the funding pause, saying Trump was following through on his promise to turn Washington upside down if elected to a second term.
However, the effects were being felt far from the nation’s capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, were worried about getting cut off.
“The lack of clarity and uncertainty right now is creating chaos,” spokeswoman Jenny Young said. She said “seniors may panic not knowing where their next meals will come from.”
The National Science Foundation postponed this week’s panels for reviewing grant applications. Officials in Prichard, Alabama, feared they wouldn’t receive infrastructure funding to fix their leaking drinking water system. Republican leaders in Louisiana said they were “seeking clarity” to ensure nothing was “jeopardizing financial stability of the state.”
“Trump’s actions would wreak havoc in red and blue communities everywhere,” said Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee. “We are talking about our small towns, our cities, our school districts.”
The full scope of the administration’s review was spelled out in a 51-page spreadsheet sent to federal agencies and viewed by The Associated Press. Each line was a different government initiative, from pool safety to tribal workforce development to special education.
Officials were directed to answer a series of yes or no questions for every item on the list, including “does this program promote gender ideology?” or “does this program promote or support in any way abortion?” Responses are due by Feb. 7.
Trillions of dollars are potentially under review. Grants that have been awarded but not spent are also supposed to be halted if they might violate one of Trump’s executive orders.
“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,” wrote Matthew Vaeth, the acting director of the Office of Management and Budget, in a memo distributed Monday.
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.” He also wrote that the pause should be implemented “to the extent permissible under applicable law.”
The pause on grants and loans was scheduled to take effect at 5 p.m. ET, just one day after agencies were informed of the decision.
Democrats 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.
New York Attorney General Letitia James planned to ask a Manhattan federal court to block the funding pause.
“There is no question this policy is reckless, dangerous, illegal and unconstitutional,” she said.
Separately, group of nonprofit organizations filed a lawsuit in Washington saying that the funding pause is “devoid of any legal basis or the barest rationale.”
The issue dominated the first briefing held by White House press secretary Karoline Leavitt. She said the administration was trying to be “good stewards” of public money by making sure that there was “no more funding for transgenderism and wokeness.”
She denied that Trump was deliberately challenging Congress to establish his dominance over the federal budget.
“He’s just trying to ensure that the tax money going out the door in this very bankrupt city actually aligns with the will and the priorities of the American people,” she said.
The Environmental Protection Agency confirmed that it would implement the pause to “align federal spending and action with the will of the American people as expressed through President Trump’s priorities.” The Department of Energy also said it was conducting a review of its spending.
The funding 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.
For example, federal employees are being asked to report their colleagues if they try to continue diversity, equity and inclusion initiatives.
“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,” Light said. “You’ve got to deliver.”
Fears about interruption in government services were exacerbated as states reported problems with the Medicaid funding portal, where officials request reimbursement for providing healthcare to poor residents.
Democrats condemned the Trump administration, connecting the issue to the funding pause.
But Leavitt said the portal would be back online soon.
“We have confirmed no payments have been affected — they are still being processed and sent,” she posted on social media.