WASHINGTON — 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, which came late Monday. 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 shaken 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, 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 being blocked from 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 Wednesday 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.”
Across the country, people in charge of similar organizations spent the day trying to get answers about the future of their federal funding.
Dr. Theresa Cullen, the director of the Pima County Health Department in Tucson, Arizona, said her agency, which gets about half of its money from the federal government, had already stopped making new purchases for breast cancer screenings, HIV prevention, efforts to track a rash of tuberculosis cases and distribution of Narcan to prevent opioid deaths.
“Today they will be OK,” Cullen said. “I don’t know about next week.”
The National Able Network, a nonprofit based in Chicago that provides job training to unemployed Americans 55 and older, tried to log into the government’s payment portal but got a “down for maintenance” error. Health researchers who rely on federal funds got a similar message when they tried to access their funds.
Dominika Parry, the president of 2C Mississippi, a nonprofit group that provides emergency services to low-income residents during disasters, had been awarded $19.8 million from the Environmental Protection Agency as part of a grant through the Inflation Reduction Act, the signature legislation of President Joe Biden.
Parry said a formal award letter, which should have arrived by email, never did. She said Tuesday that she had made a flurry of desperate calls and sent emails, none of which were answered.
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.
Other federal officials also sidestepped specific questions. Budget office officials said that activities funded by the federal government would not be affected if they were not “in conflict” with Trump’s priorities. But the officials declined to say how that would play out in the coming days.
At the Health and Human Services Department, the office that handles media requests responded with an automated email that said it could not answer questions from reporters: “HHS has issued a pause on mass communications and public appearances that are not directly related to emergencies or critical to preserving health.”
The uncertainty caused a surge of panic across the country among providers of services that are funded, at least in part, by the federal government.
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.
“Many of them do not have the budget flexibility to keep offering the services that are needed, even for a short period of time,” he said.
Alison Hard, director of public policy at the National WIC Association, which supports the program that provides help to low-income pregnant women, infants and children, said it was unclear what the effect would be on the $7 billion program, which is fully funded by the federal government.
“For now we encourage families to continue to come in to WIC as normal until we know more,” she said.
The answers to the legal and practical questions to Trump’s order remain unclear. But there is little doubt that the order is a stark warning to Trump’s political adversaries: Believing he has a mandate to transform America, he has no intention of tinkering around the edges.
In the budget office memo released late Monday, the Trump administration said federal agencies must temporarily stop the “(i) issuance of new awards; (ii) disbursement of federal funds under all open awards; and (iii) other relevant agency actions that may be implicated by the executive orders.”
It said the activities to be halted during a two-week review are any “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.”
That message is embedded in almost everything that Trump has done since retaking the presidency. His aides have said they are using a flood-the-zone strategy in part to overwhelm the opposition to any single part of his agenda.
Democrats and state attorneys general warned that the president’s action Monday night could put at risk federal funding that is sent to local and state police departments to fight serious crime and terrorism.
“Police chiefs who deal with violent crime and look to the federal government for support are hopeful that the administration will share those priorities,” said Chuck Wexler, the director of a police research group, who said he had spent part of Tuesday on conference calls with police chiefs trying to get clarity on the Trump administration memo.
Even some supporters of Trump appeared to be taken aback by his order and the confusion about what it might affect.
In Louisiana, Gov. Jeff Landry, a Republican ally of the president, issued a statement urging Trump’s government to provide more time and explanation.
“President Trump was elected on a mandate to cut government waste and increase the impact of every federal taxpayer dollar, a goal we whole heartedly embrace,” he wrote, adding that his administration was “seeking clarity” from the federal budget office about the order. “We urge OMB to develop a responsible runway to untangle us from any unnecessary and egregious policies without jeopardizing the financial stability of the state.”
This article originally appeared in The New York Times.
© 2025 The New York Times Company