A federal judge granted a "brief administrative stay" halting enforcement of the Trump administration's federal funding freeze just before it was set to go into effect.
U.S. District Judge Loren L. AliKhan ruled Tuesday afternoon that payment of active federal awards would have to continue, effective immediately and through at least Monday, February 3. The Trump administration would remain free to pause and review new awards, meaning new grants and funding would still be halted for the time being in accordance with the memorandum.
AliKhan's order also directs all federal agencies to submit detailed reports on "any programs, projects or activities subject to this pause" by no later than Feb. 10, 2025.
The judge cited the "specter of irreparable harm" in issuing the stay. The court will now take time to review more details of the case. Parties have been instructed to brief the court no later than Friday and the court will hold a new hearing on Feb. 3.
AliKhan's order stems from a lawsuit brought by the National Council of Nonprofits, American Public Health Association, Main Street Alliance and SAGE.
Separately, about two dozen states, including New York and California, sued to fight against the funding freeze.
"Immediately blocking the majority of federal funds to states is unconstitutional and dangerous,” New York Attorney General Leticia James said. “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.
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The order, as proposed, would impact a huge swath of federal funds already allocated for things like the Inflation Reduction Act and Bipartisan Infrastructure Bill projects, as well as foreign aid commitments and funding for some non-profit organizations and services.
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According to a senior administration official, the federal funding freeze would not apply across the board and would not impact individual payments or assistance, including things like Supplemental Nutrition Assistance Program food benefits for low-income families. Social Security and Medicare payments were also not slated to be impacted.
The Department of Veterans Affairs confirmed late on Tuesday that "all 44 of its financial assistance programs will continue uninterrupted and that all VA programs and operations will continue uninterrupted."
However, there was still some confusion that the Trump administration had to clarify on Tuesday.
The White House is aware of the Medicaid website portal outage.We have confirmed no payments have been affected — they are still being processed and sent. We expect the portal will be back online shortly.
— Karoline Leavitt (@PressSec) January 28, 2025
The proposed pause was not meant to be permanent and was intended to give federal agencies time to ensure their grants, loans and programs comply with Trump administration policies and goals, officials said. Agencies could also seek exemptions on a case-by-case basis.
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"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," Office of Management and Budget Acting Director Matthew Vaeth said in a memo. "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."
