A federal court has temporarily blocked President Donald Trump's effort to suspend federal funding while his administration conducts a sweeping ideological overhaul to root out progressive initiatives.
The executive order capped the most chaotic day for the US government since Trump's return to office, when uncertainty over a key financial lifeline caused panic and confusion among states, schools and organizations that depend on trillions of dollars from Washington.
U.S. District Judge Loren L. AliKhan blocked the funding freeze just minutes before it was due to come into force. The administrative hold, prompted by a lawsuit filed by nonprofit groups that receive federal money, lasts until Monday afternoon. Another court hearing is scheduled for that morning to address the issue.
The White House did not immediately comment on the order, which leaves unresolved a potential constitutional conflict over control of taxpayer money. Democrats lashed out at the Republican president, calling his actions arbitrary and illegal.
Administration officials said the decision to halt loans and grants was necessary to ensure spending was consistent with Trump's recent blitz of executive orders. The Republican president wants to increase fossil fuel production, repeal protections for transgender people and end efforts for diversity, equality and inclusion.
But a vaguely worded memorandum issued by the Office of Management and Budget, combined with incomplete responses from the White House throughout the day, left lawmakers, public officials and everyday Americans scrambling to figure out what programs would be affected by the suspension. Even a temporary lapse in funding could cause layoffs or delays in public services.
"It just kind of came out of the blue," He said David Smith, a spokeswoman for the Shawnee Mission School District in Kansas, one of countless districts that receive federal funding. Now he's trying to figure out what that means "based on zero information."
The Democrats argued that the president does not have the right to unilaterally stop spending money appropriated by Congress. Just minutes after AliKhan issued her ruling, Democratic attorneys general from 22 states and the District of Columbia filed their own lawsuit seeking to block and permanently prevent the administration from cutting off federal funding.
"There is no doubt that this policy is reckless, dangerous, illegal and unconstitutional," said New York's attorney general Letitia James.
AliKhan, who was appointed by President Joe Biden, questioned the extent to which the details of the funding freeze had been finalized at the time she issued her order.
"It appears that the federal government does not actually know the full scope of the programs that will be subject to suspension at this time," She said.
Jessica Mortona lawyer for the National Council of Nonprofits, which filed the lawsuit, said the group has tens of thousands of members across the country who could be affected.
"Our client members have reported that they are very concerned that they will have to close if there is even a brief pause," Morton said.
Counsel to the Ministry of Justice Daniel Schwei argued that the freeze should not be suspended because the plaintiffs had not identified anyone who would immediately lose funds if it came into effect.
Trump administration officials have said programs that provide direct assistance to Americans will not be affected, such as Medicare, Social Security, student loans and food stamps. Sometimes, however, they struggled to provide a clear picture.
White House Press Secretary Karoline Leavitt initially would not say whether Medicaid is exempt from the freeze, but the administration later clarified that it is.
Although Trump has promised to turn Washington upside down if elected to a second term, the effects of his efforts to suspend funding have been felt far from the nation's capital. Organizations like Meals on Wheels, which receives federal money to deliver meals to the elderly, feared being cut off.
"Uncertainty and ambiguity are now causing chaos," said spokeswoman Jenny Young. She added that "seniors can panic when they don't know where their next meal will come from".
The National Science Foundation this week postponed panels to review grant applications. Officials in the city of Prichard, Alabama, feared they wouldn't get funding for infrastructure to fix a leaky drinking water system. Republican officials in Louisiana said they were "seeking clarification" to make sure nothing "threatens the financial stability of the state."
"Trump's actions would wreak havoc in red and blue communities everywhere," said Senator Patty Murray from Washington, the top Democrat on the Senate Appropriations Committee. "We're talking about our small towns, our cities, our school districts."
The full scope of the administration's review was outlined in a 51-page table sent to federal authorities and seen by the Associated Press. Each line item represented a different government initiative, from pool safety to tribal workforce development to special education.
Officials were asked to answer a series of "yes" or "no" questions for each item on the list, including questions such as "does this program support gender ideology?" or "does this program promote or support abortion in any way?" Responses are due by 7 February.
Trillions of dollars are potentially under review. Grants that have already been awarded but have not been exhausted are also to be stopped if they might violate any of Trump's executive orders.
"Using federal resources to promote Marxist equality, transgenderism and green new deal social engineering policies is a waste of taxpayer money that does not improve the daily lives of those we serve," by Matthew Vaeth, acting director of the Office of Management and Budget, in a memo sent out Monday.
Vaeth wrote that "each agency must complete a comprehensive analysis of all of its federal financial assistance programs to identify programs, projects, and activities that may be affected by any of the President's Executive Orders." He also wrote that a pause should be made "to the extent permissible under applicable law".
The pause for grants and loans was scheduled to go into effect at 5 p.m. EDT, just one day after the agencies were informed of the decision.
Leavitt, who held her first White House briefing on Tuesday, said the administration is trying to be "good steward" public money by making sure that "will no longer fund transgenderism and wokna".
She denied that Trump was deliberately challenging Congress to consolidate his control over the federal budget.
"They're just trying to make sure that the tax money that's going out in this very bankrupt city is actually aligned with the will and priorities of the American people," She said.
The attempted financial pause is the latest example of Trump using his power over the federal system to advance his conservative goals. Unlike his first term, when Trump and many members of his inner circle were not familiar with Washington, this time he is reaching deep into the bureaucracy.
For example, it asks federal employees to denounce their colleagues if they seek to advance diversity, equity and inclusion initiatives.
"They're pushing the president's agenda from below," He said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.
He added that Trump's approach carries some risks, especially with so many voters dependent on Washington.
"You can't just nag, nag, nag," Light said. "You have to accomplish something."
Concerns about disruption of government services were heightened when states reported problems with the Medicaid funding portal, where officials seek reimbursement for providing health care to poor residents.
Democrats have condemned the Trump administration and linked the issue to the suspension of funding.
However, Leavitt said the portal will be back up and running soon. "We have confirmed that no payments have been affected - they are still being processed and sent," she said on social media.
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