Amid Confusion and Panic, WH Rescinds Funding “Freeze” on Grants and Programs

A federal judge has issued a stay on an Office of Management and Budget (OMB) memo that sought to freeze federal spending for several programs and grants, ostensibly to give the Trump administration time to review how federal funds are being spent.

The priorities of the administration, according to that memo, include ensuring monies aren’t being disbursed to fund “wokeness,” “Marxist equity,” programs aimed at recognizing transgender rights, and what the office calls “green new deal social engineering” — a clear indication that the freeze was aimed at identifying grants and allocated funds that don’t align with President Donald Trump’s far right agenda.

The memo makes clear that federal spending going directly to individuals would not be affected by the order — funding for programs like Medicare and Social Security was exempt, for example. However, grants, cooperative agreements, loans, interest subsidies and other types of payments would be affected.

On Tuesday, the memo had an incredible effect on spending across myriad programs, blocking access to grants and funds that millions of Americans rely on each day.

Among the many programs that were blocked on Tuesday were the Medicaid portals of every state, making it impossible for physicians to request funds from the government while treating patients across the country. Other programs, such as Head Start, grants for community health centers, Meals on Wheels, after-school programs, housing vouchers and rental assistance, aid to foreign nongovernmental agencies, and more, were also likely affected or set to be impacted by the freeze.

The freeze was technically supposed to begin at 5 pm Eastern Time. However, several services, including states’ Medicaid portals, were blocked well before then.

Just before the 5 pm deadline, U.S. District Judge Loren L. AliKhan placed a stay on the OMB memo. Briefings on its legality will be heard later this week, with a final order on whether to lift or continue the injunction set for Monday.

There is considerable disagreement over whether an executive action to block the funding of these grants and programs is actually allowed. For starters, there is no constitutional authority for a president of the United States or their executive agencies, like the OMB, to block such funding.

“Allowing President Trump’s actions to remain unchallenged sets a dangerous precedent for future brazen power grabs,” read a statement from Citizens for Responsibility and Ethics in Washington (CREW). “The idea that the president can stop spending for any congressionally approved program for any reason, for any amount of time, and without a single communication to Congress lacks merit and inverts the proper separation of powers between the legislative and executive branches.”

Democratic politicians and other critics lambasted the administration for issuing the legally dubious memo, noting that millions of Americans who benefit from the programs would suffer as a result.

“This is a blatant attempt to rip away health care from millions of Americans overnight and will get people killed,” Sen. Ron Wyden (D-Oregon) said on Monday evening, after the contents of the memo were revealed.

“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” read a joint letter directed to the White House from Sen. Patty Murray (D-Washington) and Rep. Rosa DeLauro (D-Connecticut).

Diane Yentel, the president and CEO of the National Council of Nonprofits, also warned of the dangers of a potential ruling allowing the Trump administration’s freeze to move forward.

“From pausing research on cures for childhood cancer to closing homeless shelters, halting food assistance, reducing safety from domestic violence, and shutting down suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives,” Yentel told CBS News.