Image for Trump Orders Sprawling, Vague Funding Freeze

States Get Temporary Court Delay as Democrats Seek Clarity Amid Confusion

President Trump sustained his frenzy of executive orders this week, including one immediately halting grant and loan disbursements to ensure compliance with previous executive orders targeting “Marxist equity, transgenderism and green new deal social engineering policies”.

Delaware AG Kathy Jennings

Several states with pending projects, including Oregon and Washington, are planning to file legal actions to stop the order before it goes into effect today at 5 pm. Before the deadline, U.S. District Judge Loren AliKhan temporarily halted the freeze until February 3, calling the order a “brief administrative stay”.

Before the 5 pm deadline, Trump officials issued a clarification that sought to sharply limit the impact of the funding freeze, but it came too late to quell the confusion or the court order. In the confusion, Medicaid payment portals were closed Tuesday.

The sweeping order exempted Social Security, Medicare other programs providing direct aid to individuals and gave the Office of Management and Budget discretion on a “case-by-case basis” to allow disbursements if “permissible under applicable law” and align with Trump priorities.

New White House Press Secretary Karoline Leavitt defended the funding pause while promising direct aid to individuals would not be affected by the freeze, a promise that may not hold up if funding streams to states that go to individuals is disrupted. Leavitt said she would need to check to see if the freeze affect Medicaid payments.

“At face value, this order represents a significant halt to the flow of funds from programs that could account for as much as 20 percent of all federal spending, excluding interest on the debt,” according to an analysis by CFM’s Federal Affairs team led by Joel Rubin. “The order indicates total spending on programs meeting the definition of ‘federal financial assistance’ could reach $3 trillion in fiscal 2024, though exemptions are likely to reduce this figure.”

“Programs potentially affected by the new executive order include Community Development Block Grants, Medicaid, school breakfast and lunch programs, Section 8 rental assistance, Title 1 education grants, Temporary Assistance for Needy Families, state grants for childcare, Head Start, and the Special Supplemental Nutrition Program for Women, Infants, and Children.” CFM’s Federal Team says. “The broadly written EO is leaving everyone guessing what exactly this could mean.”

Watchdog group Citizens for Responsibility and Ethics in Washington (CREW) has urged congressional leaders to investigate whether Trump’s 90-day freeze on previously appropriated funds, including for foreign aid and clean energy projects, violates a 1974 law that restricts a president’s ability to delay or cancel funding.

Reports from each agency on all accounts subject to the pause are due back to OMB on February 10. Meanwhile, federal agencies are ordered to withdraw previously published award solicitations and “cancel awards already awarded that are in conflict with Administrative priorities” to the extent allowed by law. A flood of lawsuits is likely from aggrieved parties that have signed contracts or been promised federal funds by the prior administration.

“It’s hard to make sense of exactly how this process will unfold,” CFM’s Federal Team explains. “However, it’s fair to say this EO is going to be wildly unpopular among many in both parties in Congress and in states across the country. Pulling back federal funds from longstanding formula programs and competitive grants is likely a bridge too far, defies political gravity and likely in violation of the Impoundment Clause.”

I-5 Columbia River Bridge Impact
One casualty of the executive order could be the Federal Highway Administration’s $1.5 billion grant for the I-5 Columbia River Bridge replacement. The project earlier received a $600 million U.S. Department of Transportation Mega grant.

A decision on the specifics of a replacement bridge is due September 8. Bridge backers hope to “put a shovel in the dirt the next day”. Meanwhile, contracts haven’t been signed and checks haven’t been written. No one knows how Trump executive orders may impact funding for the project.

As contemplated, the replacement bridge will include light rail lines between Portland and Vancouver. Disputes over light rail torpedoed a previous bridge replacement effort, and some opposition in Southwest Washington remains. The Project 2025 handbook for Trump’s second term isn’t especially friendly toward public transit. Interestingly, the original I-5 bridge provided tracks for streetcars.

Democratic Response
House Democrats, led by Maryland Congressman Steny Hoyer, sent a letter to the administration seeking clarification of the January 20 executive order that targeted the Infrastructure Law and Inflation Reduction Act, potentially affecting politically popular projects throughout the country.

“This executive order is a source of great anxiety for communities and businesses across the country that use this funding to build new roads, fix bridges, replace lead pipes, expand broadband access, strengthen infrastructure against natural disasters and much more,” the letter to OMB officials said. “Work is already underway on tens of thousands of projects in both the public and private sector, but their completion depends on these funds, which were already approved by Congress and enacted into law.”

“A day after President Trump issued the executive order, you followed up with a memorandum that did little to clarify exactly which projects and programs the executive order paused,” the letter signed by 150 Democrats continued. “In the memorandum, you wrote, ‘this pause only applies to funds supporting programs, projects or activities that may be implicated by the policy established in Section 2 of the order. Section 2 of the order, however, provides only a series of broad, subjective policy objectives, rather than detailed guidelines specifying which projects ought to be frozen. Additionally, your memorandum states that ‘agency heads may disburse funds as they deem necessary after consulting with the Office of Management and Budget.’”

“We urge you to clarify what specific funds this Administration is withholding unconstitutionally – funds that our laws require be invested in American communities. The American people deserve an answer, and if President Trump’s repeated claims that he cares about government transparency were honest, you will provide them with one.”

The letter concluded with, “As a businessman, President Trump ought to know that delaying an ongoing construction project comes at an immense dollar price. As a president, he ought to know that delaying these projects needlessly makes our government less efficient.”