Last update: Jan. 29, 2:45 p.m.
President Donald Trump's budget office on Wednesday rescinded a memo freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country. The reversal is the latest sign that, even with unified control of Washington, Trump's plans to dramatically and rapidly reshape the government has some limits.
📝 MORE: Trump White House rescinds memo freezing federal grants after widespread confusion
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PHILADELPHIA (KYW Newsradio) — After a day of confusion and turmoil, a judge has temporarily halted President Donald Trump’s directive to “pause” federal funding while his administration conducts an across-the-board ideological review to uproot progressive initiatives. But Pennsylvania and Philadelphia officials remain concerned and confused about what will happen next.
The Trump administration plan plunged the U.S. government — and states and organizations that rely on federal funding — into panic and confusion and set the stage for a constitutional clash over control of taxpayer money.
The order from U.S. District Judge Loren L. AliKhan came minutes before the funding freeze was scheduled to go into effect on Tuesday afternoon — just one day after agencies were informed of the decision. The administrative stay, prompted by a lawsuit brought by nonprofit groups that receive federal funds, lasts until Monday afternoon and applies only to existing programs.
Administration officials said the decision to halt loans and grants — a financial lifeline for local governments, schools and nonprofits — was necessary to ensure that spending complies with Trump's recent blitz of executive orders. The Republican president wants to increase fossil fuel production, remove protections for transgender people and end diversity, equity and inclusion efforts.
But a vaguely worded memo issued by the Office of Management and Budget, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services.
AliKhan, who was appointed by President Joe Biden, said in halting the spending freeze, "It seems like the federal government currently doesn't actually know the full extent of the programs that are going to be subject to the pause."
Just minutes after AliKhan ruled, 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.
New Jersey joined the suit, but Pennsylvania’s newly sworn-in Republican attorney general did not, despite concerns by Gov. Josh Shapiro that the directive would interfere with Medicaid, Head Start and other federally funded state programs that veterans, families, children and governments led by both Republicans and Democrats rely on across the country.
Shapiro called the president’s directive “chaotic and really reckless” and says he’s monitoring the situation.
Pennsylvania got more than $7 billion in federal assistance last year. Philadelphia, alone, got $1 billion.
Mayor Cherelle Parker’s office says they’re still reviewing the directive, but Councilman Curtis Jones says he wants to take action.
“This is antagonistic policy to incite trauma in many communities where [Trump] did not win the vote,” Jones said.
He is concerned about programs such as school meals and nutrition for pregnant women and babies, which appear to be on the list of grants to be frozen.
“We’re going to try to Trump-proof the Commonwealth of Pennsylvania, and we’re talking to state officials,” Jones said. “We’re going to try to the best degree that we can to Trump-proof the city of Philadelphia.”
Jones says he’s not sure what form that would take but the consequences could be severe if the federal assistance freeze is allowed to proceed on Monday and the city loses funds for school meals and other essential benefits.
“This is not going to end well. We could have people in the streets, hungry.”
Trump administration officials said programs that provide direct assistance to Americans would not be affected, such as Medicare, Social Security, student loans and food stamps. White House press secretary Karoline Leavitt on Tuesday initially would not say Medicaid was exempted from the freeze, but the administration later clarified that it was.
The effects of the order were being felt far from the nation's capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, were worried about getting cut off.
"The lack of clarity and uncertainty right now is creating chaos," spokeswoman Jenny Young said. She added that "seniors may panic not knowing where their next meals will come from."
The full scope of the administration's review was spelled out in a 51-page spreadsheet sent to federal agencies and viewed by The Associated Press. Each line was a different government initiative, from pool safety to tribal workforce development to special education.
Officials were directed to answer a series of yes or no questions for every item on the list, including "does this program promote gender ideology?" or "does this program promote or support in any way abortion?" Responses are due by Feb. 7.
Trillions of dollars are potentially under review. Grants that have been awarded but not spent are also supposed to be halted if they might violate one of Trump's executive orders.
"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," wrote Matthew Vaeth, the acting director of the Office of Management and Budget, in a memo distributed Monday.
Vaeth wrote that "each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President's executive orders." He also wrote that the pause should be implemented "to the extent permissible under applicable law."
The issue dominated the first briefing held by White House press secretary Karoline Leavitt. She said the administration was trying to be "good stewards" of public money by making sure that there was "no more funding for transgenderism and wokeness."
Democrats say the Trump administration's decision is illegal, arguing the president had no right to unilaterally stop spending money appropriated by Congress. Leavitt denied that Trump was deliberately challenging Congress to establish his dominance over the federal budget.
"He's just trying to ensure that the tax money going out the door in this very bankrupt city actually aligns with the will and the priorities of the American people," she said.
The Environmental Protection Agency confirmed that it would implement the pause to "align federal spending and action with the will of the American people as expressed through President Trump's priorities." The Department of Energy also said it was conducting a review of its spending.
The funding pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he's reaching deep into the bureaucracy.
For example, federal employees are being asked to report their colleagues if they try to continue diversity, equity and inclusion initiatives.
"They are pushing the president's agenda from the bottom up," said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.
He also said there are risks in Trump's approach, especially with so many voters reliant on Washington.
"You can't just hassle, hassle, hassle," Light said. "You've got to deliver."