Trump aid freeze stirs chaos before it is blocked in court

WASHINGTON - US President Donald Trump’s attempt to

freeze hundreds of billions of dollars in federal aid

was temporarily blocked in court on Jan 28, 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 5pm, a federal judge blocked Mr 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 Feb 3.

Mr Trump’s sweeping directive was the latest step in

his dramatic effort to overhaul the federal government,

which has already seen the new President halt foreign aid, freeze hiring and shutter diversity programmes across dozens of agencies.

His administration also offered buyouts to federal workers on Jan 28 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 disrupting payments to doctors and pre-school teachers. Republicans largely defended the order as a fulfilment of Mr Trump’s campaign promise to rein in the $6.75 trillion (S$9.1 trillion) budget.

The Trump administration said programmes delivering critical benefits 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 federal government was aware of the Medicaid portal outage and no payments had been affected. The website will be back online shortly, she said.

Healthcare 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 Ms Sara Ratner of healthcare company Nomi Health.

The order, laid out in a memo from the White House budget office, was meant to freeze federal grants and loans as of 5pm on Jan 28 while the administration ensures they are aligned with the Republican President’s priorities, including executive orders he signed ending diversity, equity and inclusion efforts.

Wide-reaching programmes

Federal grants and loans reach into virtually every corner of Americans’ lives, with trillions of dollars flowing into education, healthcare and anti-poverty programmes, 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 Jan 28’s freeze included any money intended “for foreign aid” and for “non-governmental organisations”, among other categories. It directed 55 agencies to examine more than 2,600 individual grant programmes.

The White House said the pause would not impact Social Security or Medicare payments to the elderly or “assistance provided directly to individuals”, such as some food aid and welfare programmes for the poor.

In a second memo released on Jan 28, the White House said funds for Medicaid, farmers, small businesses, rental assistance and the Head Start pre-school programme 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 pre-schools 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 Republican President’s suspension of foreign aid, which began cutting off the supply of life-saving medicines on Jan 28 to countries around the world that depend on US development assistance.

A Reuters/Ipsos poll released on Jan 28 found that Mr Trump’s approval rating has fallen slightly to 45 per cent 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 US$4 billion in funding, according to a memo seen by Reuters, including aid for the National Center for Missing and Exploited Children.

Mr 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 per cent of the budget goes toward government interest payments, which cannot be touched without triggering a default that would rock the world economy.

Democrats criticised 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 Mr Trump said during his campaign that he believes the president has the power to withhold money for programmes 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.

US Representative Tom Emmer, the No. 3 Republican in the House of Representatives, said Mr Trump was simply following through on his campaign promises.

“You need to understand he was elected to shake up the status quo. That is what he’s going to do,” Mr Emmer told reporters at a Republican retreat in Miami.

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 programme 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. REUTERS