Federal judge temporarily blocks Trump freeze on federal grants

WASHINGTON (CN) — A federal judge on Tuesday temporarily blocked President Donald Trump’s freeze on federal grants and loans that could total trillions of dollars, just minutes before the order was set to take effect.

U.S. District Judge Loren AliKhan placed an administrative stay on the action after scheduling an emergency hearing Tuesday afternoon to hear from a coalition of organizations that rely on such federal aid. The administrative stay pauses Trump’s freeze until Monday to allow for further litigation.

The stay comes as Trump’s order, which was set to take effect at 5 p.m. Tuesday, caused widespread panic among organizations and households around the nation which depend on federal aid to survive.

The freeze was made public Monday night in a leaked memo from the White House’s Office of Management and Budget, which directed federal agencies to “temporarily pause activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the Green New Deal.”

Acting OMB Director Matthew Vaeth wrote in the memo that the agencies would have to submit reports by Feb. 10, detailing each program affected by the pause and could not issue any new grants, disburse any federal funds under active grants, or any “relevant agency actions” that may be implicated by 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,” Vaeth wrote.

Press Secretary Karoline Leavitt, in her first briefing Tuesday afternoon, sought to clarify the order’s effects and insisted the freeze would not including funding for individual assistance programs like Social Security, Medicare, food stamps, welfare benefits and other “assistance that is going directly to individuals.”

Leavitt said that the memo was not a blanket pause and characterized the move as good stewardship of taxpayer dollars.

She said grant recipients and federal agencies could contact Trump’s nominee to head the budget office, Russell Vought, to advocate on behalf of grant programs that are “necessary and in line with the president’s agenda” so that Vought may review them.

Vought, whose confirmation hearing is scheduled for Thursday, faced pushback from Senate Democrats after they demanded that Senate Republicans delay the vote until the Trump administration backs off the effort to freeze federal aid.

Oregon Senator Jeff Merkley, the top-ranking Democrat on the Senate Budget Committee, decried Trump’s move as a “constitutional crisis.”

The National Council of Nonprofits, with the American Public Health Association, the Main Street Alliance and LGBTQ-advocacy group SAGE requested the administrative stay on Tuesday, warning of the freeze’s “devastating impact on hundreds of thousands of grant recipients.”

The advocacy groups acknowledged the Trump administration’s right to advance its agenda, but argued that the freeze order has no legal authority.

Also Tuesday, a multistate coalition led by New York Attorney General Letitia James sued the Trump administration, with James warning the pause is “reckless and dangerous” and put essential services for millions of Americans at risk.

The attorneys general of California, Illinois, Massachusetts, New Jersey and Rhode Island lead the lawsuit with James. Also joining the action are Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Vermont, Washington state, Wisconsin and the District of Columbia.

In California, Oregon, Illinois and other states, the online portal Payment Management Services — used by state Medicaid departments to receive federal funding — reportedly stopped working early Tuesday. While the portal was down, it displayed a red banner that warned of possible delays because of “executive orders regarding potentially unallowable grant payments.”

Officials from Head Start, the federal early childhood education program, also reported being locked out of payment websites and would be unable to make payroll or pay rent without access to the sites.

Trump did not address the chaos, instead posting on Truth Social about Tennessee lawmakers considering a school choice bill and CNN anchor Jim Acosta’s announcement that he was leaving the network.

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