On Tuesday, January 28th, Judge Loren AliKhan of the Washington DC District issued a last-minute order at the White House to temporarily block federal agencies from carrying out a directive from the White House.
Judge AliKhan hastily arranged a court hearing on Tuesday and announced at the end of the hearing that she would issue a brief restraining order. The White House had previously ordered a halt to federal funding, loans, and other financial assistance programs that could amount to trillions of dollars.
On Monday night, the Office of Management and Budget (OMB) issued a memorandum to federal agencies directing the suspension of certain federal funding, loans, and other financial aid programs. The memorandum instructed federal agencies to complete a form answering questions about projects that may require funding and to provide information related to projects or activities ending by March 15.
The memorandum stated that federal agencies must temporarily cease all activities related to obligations or payments associated with federal financial assistance, as well as other agency activities potentially affected by the executive order, including but not limited to foreign aid, non-governmental organizations, DEI, gender equality initiatives, and green new deal financial assistance.
It further required federal agencies to conduct a comprehensive analysis of all their federal financial aid programs to identify plans, projects, and activities that may be affected by the presidential executive order.
The memorandum added that the suspension must be implemented “to the extent permitted by applicable law,” and agencies must report any legal actions or deadlines during the suspension period immediately to the OMB and provide detailed information on all suspended projects, plans, and activities by February 10.
The memorandum also mentioned that exemptions could be granted “based on specific circumstances” and that the suspension would take effect at 5 p.m. on Tuesday.
The memorandum faced strong opposition from Democratic lawmakers.
Critics argued that the White House directive had caused confusion, making it difficult for states to access funding through the funds portal for handling medical assistance, emergency aid, and low-income education and nutrition services.
Critics also contended that the language of the White House directive was vague, making it challenging for government officials, legislators, non-profit organizations, and other entities to determine which projects would be halted.
Some federal officials even questioned whether all federal aid programs, including medical assistance, school nutrition programs, rental assistance, and highway funding, would be suspended.
Critics further complained that the footnote in the memorandum mentioned that health insurance, social security benefits, and assistance provided directly to individuals would not be affected, but did not clarify if other programs would be impacted.
Senate Minority Leader Chuck Schumer, a Democrat from New York, was one of the Democratic lawmakers criticizing the funding halt.
He stated that “halting funding would jeopardize ‘billions in community funding and financial support that help millions nationwide,'” leading to delayed wages and rent payments, affecting everything from universities to non-profit charitable organizations, national disaster relief, local law enforcement, elderly care, and all matters related to providing food to those in need.
Democrats argued that the Trump administration’s move raised constitutional issues, encroached on Congress’s financial authority, and disrupted mechanisms to ensure funding for priority matters through the appropriations process.
White House spokesperson Karoline Leavitt stated in a press conference on the 28th that the funding pause did not entail a complete halt to spending but was to ensure that “every penny spent aligns with the President’s executive orders and actions.” She emphasized that social security or Medicare for seniors would not be affected, and assistance directly targeted for individuals, such as welfare programs for low-income individuals and food aid, would continue.
Leavitt took to social media to clarify that medical funds would still be processed, stating, “We have confirmed that no payments are affected.”
According to the OMB memorandum, in the 2024 fiscal year, the federal government spent over $3 trillion on federal aid such as grants and loans.
Based on data from the non-partisan Congressional Budget Office, the government was projected to spend around $7 trillion in the current fiscal year ending on September 30.
(Reference from The Wall Street Journal)