WASHINGTON — Amid panic and confusion among both government officials and the American people who rely on federal funding, the White House scrambled to contain the fallout on Tuesday after President Donald Trump’s administration abruptly halted federal grants and loans.
On Monday night, the Office of Management and Budget sent a vaguely worded, two-page memo to all federal agencies. The memo instructed them to “temporarily halt all activities related to the obligation or disbursement of all Federal financial assistance” that may conflict with Trump’s agenda.
Several nonprofit organizations reported on Tuesday morning that they were unable to access a system used to access federal funds for expenses such as salaries and rent.
“While we understand that this is an evolving story, this disruption, at best, will slow down Head Start agencies’ ability to pay hundreds of thousands of staff, contractors, and small businesses who support Head Start operations in every corner of the country,” Yasmina Vinci, executive director of the National Head Start Association, said. “At worst, this means that hundreds of thousands of families will not be able to depend on the critical services and likely will not be able to work.”
It’s unclear which programs will be paused, but the Office of Management and Budget has requested details on over 2,600 programs, including school meals for low-income students, U.S. Agency for International Development foreign assistance, the WIC program for pregnant women and infants, and a program for homeless veterans.
A senior administration official clarified that the action is not a freeze on funding, describing it as a ‘brief pause’ to allow agencies time to review whether federal grants and loans align with recent executive orders signed by Trump within the past week.
White House press secretary Karoline Leavitt held her first official press briefing on Tuesday. However, she failed to provide specific details about the agencies that would be impacted. Instead, she resorted to lies, claiming that the Biden administration had implemented the Green New Deal and attributed this to Democrats’ “wokeness.”
“It means no more funding for the green new scam that has cost American taxpayers tens of billions of dollars,” Leavitt said. “It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies.”
The news quickly spread panic and confusion among both Republicans and Democrats on Capitol Hill and among everyday Americans who would be severely affected by the pause.
According to a memo sent out on Tuesday afternoon by the Office of Management and Budget, programs that directly provide assistance to Americans would be exempt from the pause. These programs include Medicaid, food stamps, small business assistance, Head Start, rental assistance, and federal Pell Grants for college students.
“If you are receiving individual assistance from the federal government, you will still continue to receive that,” said Leavitt. “However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars.”
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Medicare and Medicaid confusion
When directly asked about Medicare, which provides health insurance to over 70 million Americans, Leavitt was unable to provide a direct answer. Instead, she indicated that she would obtain a list from the OMB and distribute it to the reporters.
Medicaid payments appeared frozen on Tuesday after users across all 50 states were unable to access the website. Over 80 million people in the United States are enrolled in Medicaid, a public health insurance program that provides coverage for individuals with low incomes.
Levitt stated in a statement that the White House was aware of the outage, but it had nothing to do with the pause.
“If federal money for Medicaid doesn’t show up, states are left holding the bag, and then ultimately hospitals, nursing homes and doctors,” she said.
Backlash from Capitol Hill
The news made its way to Capitol Hill, where the majority of Republicans supported the freeze. However, Senate Majority Leader John Thune (R-S.D.) wants more clarity from the White House.
“This is not unusual for an administration to pause funding and to take a hard look and scrub of how these programs are being spent and how they interact with a lot of the executive orders that the president signed,” Thune said.
Sen. Susan Collins (R-Maine) issued a statement, saying the plan was “far too sweeping”.
“There certainly is justification to take a hard look at some programs, but this is far too sweeping, and will cause disruption in the Administration of a lot of important programs and services,” Collins said.
“This stuff is appropriated by Congress. It’s already been signed on the law, so I would say disagree with it,” said Rep. Don Bacon (R-Neb.).
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