A federal judge on Tuesday issued a stay against a White House directive that ordered a spending freeze on federal assistance, which sent Washington and organizations around the country into chaos on Tuesday as they scrambled to figure out how their programs would be affected. News of the freeze came as a surprise when the late-night memo was published by news outlets.
Judge Loren L. AliKhan for the U.S. District Court for the District of Columbia said she would put the matter on a temporary pause as she considers arguments from the U.S. government and the plaintiffs in the case, who had asked for the court to issue a restraining order against the government to stop the funding freeze.
The memo from the U.S. Office of Management and Budget called for a spending freeze on federal assistance by 5 p.m. Tuesday, which could affect everything from aid to nonprofits, universities, small business loans and state and local government grants. AliKhan paused the enforcement of the directive until at least Monday at 5 p.m. to allow for further litigation.
The current stay applies only to open programs that are federally funded. The issuance of new funding is not affected by the court action.
If enacted, any federal aid freeze could have wide-ranging implications, with the White House noting that $3 trillion was spent in 2024 on federal assistance programs.
White House press secretary Karoline Leavitt said Tuesday this is a "temporary pause" to make sure these organizations are not conflicting with President Trump's executive actions and orders.
"This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President's policies and requirements," the memo says.
The Monday night memo from OMB directed federal agencies to assess compliance with Mr. Trump's executive orders — specifically targeting "DEI, woke gender ideology and the Green New Deal." It does not give specifics on what these policies refer to, especially since the Green New Deal was never signed into law.
"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 memo says.
The White House memo said it will not affect Medicare or Social Security benefits. While Medicaid was initially not considered to be affected, online Medicaid portals throughout the country were affected on Tuesday.
A White House official said Tuesday afternoon that the Medicaid portal issues being reported had nothing to do with the funding freeze.
A spokesperson for the National Association of Medicaid Directors said they have formally sought guidance from the Trump administration to explain the interruption.
Organizations scramble
Several members of Congress said they were being slammed with questions from their constituents and organizations that could be affected. Leavitt said Tuesday that she would provide a list of the organizations affected.
Head Start, which provides pre-school funding for low-income children, said the memo has the "potential to severely disrupt the ability for Head Start programs to serve nearly 800,000 children and their families nationwide."
Meals on Wheels said Tuesday that they are trying to figure out how it affects them.
"If in fact this order includes the Older Americans Act, this would presumably halt service to millions of vulnerable seniors who have no other means of purchasing or preparing meals," the organization said in a statement.
Diane Yentel, the president and CEO of the National Council of Nonprofits, issued a statement on social media calling the order a "potential 5-alarm fire for nonprofits."
"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 said. "This order could decimate thousands of organizations and leave neighbors without the services they need."
Democrats on offensive against funding freeze
Democrats were already on the offensive on Tuesday morning.
Senate Minority Leader Chuck Schumer strongly condemned the move at a news conference, saying "in an instant, Donald Trump has shut off billions, perhaps trillions, of dollars that directly support states, cities, towns, schools, hospitals, small businesses, and most of all, families."
"This is a dagger at the heart of the average American family," Schumer said, adding that he and his Democratic colleagues are receiving a "deluge" of calls to their offices from people panicked over what the memo means for them.
"This decision is lawless, dangerous, destructive, cruel. It's illegal, it's unconstitutional," Schumer said. "Plain and simple, this is Project 2025."
Sen. Patty Murray of Washington, the top Democratic appropriator, said she's urging Sen. Lindsey Graham, a Republican appropriator, to hold Vought's nomination for OMB director, while calling the memo a "brazen and illegal move" with an "unprecedented" scope.
"Republicans should not advance that nomination out of committee until the Trump administration follows the law," Murray said.
Graham hasn't spoken with Vought but told reporters he plans to talk with OMB about the freeze.
"I don't mind reviewing things," he said. "I just want to find out what happened and what's the end game. And what do you tell people when they ask?"
Graham said, "People are asking, like, what does this mean? How long does it last? Reasonable questions."
"Some agencies, like centers to help abused children — they rely on their grant money to meet their budget," Graham said. "I want to try to find out, you know, what's happening here and give people back home some idea of what to expect."
Legal challenges already filed
As of Tuesday afternoon, a nonprofit coalition, which includes the National Council of Nonprofits and the American Public Health Association, filed a legal challenge asking a federal judge for an emergency order to block the institution of the memo, which resulted in Tuesday afternoon's stay.
"Given the few hours that remain before federal grantees are thrown into disarray, Plaintiffs file this Complaint and seek a temporary restraining order to maintain the status quo until the Court has an opportunity to more fully consider the illegality of the Trump administration's] actions," the groups wrote in the briefing.
A coalition of Democratic state attorneys general from 23 states and Washington, D.C. said Tuesday they planned to file a lawsuit to stop the freeze, claiming it is unconstitutional.
Orders from lower courts directing agencies to turn the spigot back on while legal proceedings continue could eventually lead the Justice Department to seek emergency relief from the Supreme Court.
Critics of the most recent action from the Trump administration have argued that the budget office's move to temporarily withhold federal funds violates the Impoundment Control Act, a 1974 law that lays out the framework for the president's ability to freeze certain funds appropriated by Congress.
But Russ Vought, Mr. Trump's pick to lead the Office of Management and Budget, told the Senate panel holding his confirmation hearing last week that the president believes the Impoundment Control Act is unconstitutional and said he agrees with that assessment.
Alan He contributed to this report.
