President Donald Trump’s order to freeze trillions of dollars in federal grants and loans led to confusion and outrage Tuesday as it interrupted the Medicaid system that provides health care to millions of low-income Americans and other programs that depend on the flow of federal money.
Late Tuesday afternoon, a federal judge in the District of Columbia temporarily blocked the order in response to a lawsuit filed by Democracy Forward, a liberal organization that argued that the directive violated the First Amendment and a law governing how executive orders are to be rolled out. The judge, Loren AliKhan, said she would issue a more permanent decision Feb. 3.Shortly after, attorneys general in 22 states and the District of Columbia also filed a lawsuit against the order. The attorneys general — all Democrats — said Trump had gone far beyond his legal powers when he moved to “pause” trillions of dollars in funding already allocated by Congress.
“What a ham-handed way to run the government,” said Rhode Island’s attorney general, Peter Neronha, when the lawsuit was announced.
But Trump’s plan to purge the government of what he calls a “woke” ideology already had upended the work of federal agencies and groups that receive federal funding from the government. Federal health researchers, nonprofits and programs for early childhood education reported that their usual access to federal funds had gone down, raising alarms about whether the order meant people would lose access to jobs, health care services, reduced-price meals and more.
Democrats assailed Trump’s order, which came late Monday, as an unlawful encroachment on Congress’ authority over federal spending. The White House said it simply was following through on the promises that restored Trump to the presidency.
“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,” the acting director of the Office of Management and Budget said in a two-page memo announcing the temporary halt.
In California, Oregon, Illinois and other states, an online portal where state Medicaid departments receive federal funding stopped working hours after the memo was sent, according to state officials, though it was not clear that medical services to individuals had been interrupted. The portal, Payment Management Services, had a red banner on it Tuesday afternoon warning of delays because of “executive orders regarding potentially unallowable grant payments.”
Karoline Leavitt, the White House press secretary, said in a social media post Tuesday afternoon that the administration was “aware of the Medicaid website portal outage” and promised that it would be back online shortly. Officials with the budget office said the portal outage was unrelated to the president’s order despite the banner specifically citing Trump’s directives.
State officials said they were still providing benefits to Medicaid patients and continuing to pay doctors and hospitals. But before the judge’s blocking of the order Tuesday, officials said they were concerned that the portal might not be back up by the end of the week, because many states receive a large infusion of funds at the start of every month. Feb. 1 is Saturday.
Providers who run Head Start programs for young children reported that they could no longer get access to federal funds after losing access to the federal Office of Head Start’s payment site. Chanda Hillman, the executive director of Flowers Early Learning in southwestern Michigan, said her organization’s 41 classrooms would be closed today after the payment management system through which money from Head Start is disbursed was inaccessible Tuesday morning.
Hillman said her organization, which serves about 600 children, typically gets its annual funding award from Head Start between Jan. 19 and Jan. 30, but one had not yet arrived.
“I have families that are starting to pick up kids, and we need to let them know what’s happening for tomorrow,” she said. “Just because all of the messaging is uncertain and we still can’t get into that payment system, we thought it was just best, because as a federal grantee, we can’t incur any expenses that we can’t pay for.”
Health researchers who rely on federal funds reported that the federal websites used to gain access to money for lab materials were down for “system maintenance” Tuesday.
Leavitt brushed aside concerns Tuesday during her first briefing for reporters. She insisted that “assistance that is going directly to individuals will not be impacted” but declined to answer questions about how organizations that rely on federal money — and the people they help — would be affected by the interruption in funding.
The late-night funding freeze sent officials at schools, hospitals, nonprofits, research companies and many other organizations into a frantic scramble to understand the extent of the directive and how quickly it could force them to halt activities funded in part by the federal government. Advocates said that affected programs could include, among many others, school lunch initiatives and federal infrastructure grants.
“Nonprofits are petrified right now: They don’t know if their funding is shut off; if it is shut off, they don’t know for how long,” said Rick Cohen, a spokesperson for the National Council of Nonprofits, which spent the day chasing rumors that some nonprofits had had their grant funding shut off already. Cohen said that even a pause in funding until mid-February could be devastating.