Judge pauses Trump administration’s federal funding freeze

A federal judge on Tuesday paused the Trump administration’s Office of Management and Budget (OMB) memo, which aimed to freeze funding to various federal programs.

U.S. District Judge Loren AliKhan for the District of Columbia, appointed by former President Joe Biden, imposed an administrative stay on Tuesday afternoon, pausing the Trump administration’s action.

The administrative stay pauses the freeze until Monday.

During a virtual court hearing, AliKhan heard from a Department of Justice lawyer and a lawyer for the plaintiffs, as the 5 p.m. deadline for federal funding was ticking down.

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“I do think there is the specter of irreparable harm,” AliKhan said.

New York Attorney General Letitia James on Tuesday led a coalition of 22 other attorneys general suing to stop the implementation of the memo.

In a statement from James’ office, she said the policy “puts an indefinite pause on the majority of federal assistance to states” and would “immediately jeopardize state programs that provide critical health and childcare services to families in need, deliver support to public schools, combat hate crimes and violence against women, provide life-saving disaster relief to states, and more.”

James and the coalition of attorneys general sought a court order to immediately stop the enforcement of the OMB policy and preserve essential funding.

“Immediately blocking the majority of federal funds to states is unconstitutional and dangerous,” James wrote in the statement. “Millions of Americans rely on federally funded programs every day to get the health care they need, support their families, and stay safe in their communities. Already, this policy has unleashed chaos and uncertainty, with law enforcement halting drug enforcement efforts, Medicaid portals shutting down, and other critical services being thrown into disarray…”

James and the coalition claimed the OMB’s policy has “caused immediate chaos and uncertainty for millions of Americans” who rely on state programs that receive federal funds.

They allege essential community health centers, addiction and mental health treatment programs, services for people with disabilities, and other critical health services are “jeopardized” by the policy. 

Further, they argued the policy would deprive law enforcement of much-needed resources, and halt essential disaster relief funds to places like California and North Carolina.

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“While the administration has attempted to clarify the scope and meaning of the OMB policy, states have already reported that funds have been frozen, jeopardizing services like Medicaid across the country,” according to the statement. 

At least 20 states were reportedly locked out of their Medicaid reimbursement systems on Tuesday after the federal funding freeze was announced.

White House press secretary Karoline Leavitt posted on X just before 3 p.m. Tuesday, acknowledging the Medicaid website portal experienced an outage, and said it would be restored.

“The White House is aware of the Medicaid website portal outage,” Leavitt wrote. “We have confirmed no payments have been affected — they are still being processed and sent. We expect the portal will be back online shortly.”

Leavitt also clarified that the Medicaid website glitch was unrelated to the federal funding freeze.

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Leavitt also said programs that directly affect individual Americans — giving the examples of Social Security benefits, Medicare, food stamps, welfare benefits — will remain in effect.

A supplemental memo from OMB also went out on Tuesday in an attempt to clear up confusion. 

“A pause could be as short as a day. In fact, OMB has worked with agencies and has already approved many programs to continue even before the pause has gone into effect,” the memo read.