Trump aid freeze stirs chaos before it is blocked in court

President Donald Trump's attempt to freeze hundreds of billions of dollars in federal aid was temporarily blocked in court on Tuesday, even as it sowed chaos throughout the government and stirred fears that it would disrupt programs that serve tens of millions of Americans.

Minutes before it was due to take effect at 5 pm ET (2200 GMT), a federal judge blocked Trump's spending freeze that would have affected thousands of federal grant programs.

US District Judge Loren AliKhan granted a temporary halt after several advocacy groups argued the freeze would devastate programs ranging from health care to road construction. The court will revisit the issue on Monday.

Trump's sweeping directive was the latest step in his effort to overhaul the federal government, which has already seen the new president halt foreign aid, freeze hiring and shutter diversity programs across dozens of agencies. His administration also offered buyouts to federal workers on Tuesday to shrink the size of government.

Democrats castigated the funding freeze as an illegal assault on Congress' authority over federal spending and said it was already disrupting payments to doctors and preschool teachers. Republicans largely defended the order as fulfilling Trump's campaign promise to rein in the $6.75 trillion budget.

The Trump administration said programs delivering benefits directly to Americans would not be affected. But Democratic Senator Ron Wyden said his office had confirmed that doctors in all 50 states were not able to secure payments from Medicaid, which provides health coverage to 70 million low-income Americans.

White House press secretary Karoline Leavitt said on X that the government was aware of the Medicaid portal outage and no payments had been affected. She said the website would be back online shortly.

Health care industry officials said the interruption could cause lasting damage. "If the federal government stops pushing funds out to state Medicaid contractors, the result would be a complete debacle, with Medicaid providers going out of business," said Sara Ratner of health care company NOMI Health.

The White House said the freeze was needed to ensure federal aid programs are aligned with the Republican president's priorities, including executive orders he signed ending diversity, equity and inclusion efforts.

WIDE-REACHING PROGRAMS

Trump's order faces another legal challenge from Democratic state attorneys general, who argued in a lawsuit that the freeze violates the US Constitution and would have a devastating effect on states that rely on federal aid for a substantial portion of their budgets.

Federal grants and loans reach into virtually every corner of Americans' lives, with hundreds of billions of dollars flowing into education, health care and anti-poverty programs, housing assistance, disaster relief, infrastructure and a host of other initiatives.

The proposed cuts could also take a heavy toll on Republican-leaning states, whose residents are significant beneficiaries of major federal programs.

The memo said Tuesday's freeze included any money intended for foreign aid and for nongovernmental organizations, among other categories. It directed 55 agencies to examine more than 2,600 grant programs.

The White House said the pause would not impact Social Security or Medicare payments to older Americans or assistance provided directly to individuals, such as some food aid and welfare programs for the poor. The Pentagon said it would not apply to its contractors.

In a second memo released on Tuesday, the White House said funds for Medicaid, farmers, small businesses, rental assistance and the Head Start preschool program would continue without interruption. But Democratic Senator Chris Murphy of Connecticut said the reimbursement system for Head Start had been shut down in his state, preventing preschools from paying staff.

It was unclear whether other multibillion-dollar grant programs, such as scientific research, highway construction and addiction recovery, would be affected. The White House did not appear to exempt disaster aid to areas like Los Angeles and western North Carolina that have been devastated by natural disasters. Trump pledged government support when he visited both places last week.

The freeze followed the president's suspension of foreign aid, which began cutting off the supply of lifesaving medicines on Tuesday to countries around the world that depend on US development assistance.

A Reuters/Ipsos poll released Tuesday found that Trump's approval rating has fallen slightly to 45% since he took office on Jan. 20 and majorities disapprove of his efforts to rename the Gulf of Mexico and his attempt to deny citizenship to babies born in the US whose parents are not citizens.

DISPUTED EFFECTS

Agencies were trying to understand how to implement the new order.

The Justice Department will pause $4 billion in funding, according to a memo seen by Reuters, including aid for the National Center for Missing and Exploited Children.

Trump's Republican allies have been pushing for dramatic spending cuts, though he has promised to spare Social Security and Medicare, which make up roughly one-third of the budget. Another 11% of the budget goes toward government interest payments, which cannot be touched without triggering a default that would rock the world economy.

Democrats criticized the spending freeze as unlawful and dangerous.

"This decision is lawless, destructive, cruel," Senate Democratic Leader Chuck Schumer said. "It's American families that are going to suffer most."

The US Constitution gives Congress control over spending matters, but Trump said during his campaign that he believes the president has the power to withhold money for programs he dislikes. His nominee for White House budget director, Russell Vought, who has not yet been confirmed by the Senate, headed a think tank that has argued Congress cannot require a president to spend money. Democrats sought to delay his nomination, but would need Republican support to succeed.

At least one Republican centrist, US Representative Don Bacon, said he hoped the order would be short-lived after hearing from worried constituents, including a woman who runs an after-school program that depends on federal grant money.

"We don't live in an autocracy. It's divided government. We've got separation of powers," he said.