White House seeks to tamp down concerns over funding directive

WASHINGTON — The Trump administration sought to calm the waters Tuesday after stakeholders around the country and overseas, Washington lobbyists and lawmakers on both sides of the aisle scrambled to make sense of a sweeping directive to hit the pause button on federal aid programs.

The White House budget office on Tuesday clarified the scope of Monday’s pause of federal financial assistance, saying it will not affect a number of specific aid programs.

Medicaid, the Supplemental Nutrition Assistance Program, federal student loans, Pell Grants, Head Start, Section 8 rental assistance and aid to small businesses and farmers appear to be exempt, and the official reiterated that Medicare and Social Security would not be affected, nor would “similar” direct benefit programs.

The Office of Management and Budget emphasized that the only funding affected by the pause would be any grants or loans that run counter to President Donald Trump’s executive orders laying out his policies on immigration, abortion, foreign aid, clean energy, “gender ideology,” and diversity, equity and inclusion programs.

For other grants and aid programs, the pause “could be as short as a day” if agency officials and the OMB determine the money won’t run afoul of Trump’s directives.

“In fact, OMB has worked with agencies and has already approved many programs to continue even before the pause has gone into effect,” a clarifying memo released Tuesday said. “Any payment required by law to be paid will be paid without interruption or delay.”

However, some grant recipients were reporting their access to grant funding was still frozen — such as money for Head Start and Medicaid — despite the clarifying statement from the White House. Senate Finance Committee ranking member Ron Wyden, D-Ore., said his staff confirmed that Medicaid portals in all 50 states remained shut down.

“This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed,” Wyden said in a statement.

White House Press Secretary Karoline Leavitt later disputed Wyden’s characterization, saying in a statement that no Medicaid payments were affected and that the portal was expected back online shortly.

Aggrieved parties were already filing lawsuits to stop the freeze. The National Council of Nonprofits was quick out of the gate with its suit.

“This order could decimate thousands of organizations and leave neighbors without the services they need,” the group’s president and CEO, Diane Yentel, said in a statement.

Earlier, New York Attorney General Letitia James threatened “imminent legal action against this administration’s unconstitutional pause on federal funding.”

Democrats and others said the funding pause is akin to an illegal “impoundment” of the sort that’s restricted under a 1974 law enacted to curb presidential authority to withhold money appropriated by Congress.

“No matter how much he may believe he does, the president does not have the authority to ignore the law and we’re going to fight this in every way,” Senate Minority Leader Charles E. Schumer, D-N.Y., said at a Tuesday morning news conference.

Leavitt in her daily briefing argued that the move was not an impoundment but a “temporary pause” to ensure programs were conforming to Trump’s policies.

The broad language of the mandate combined with the line-by-line accounting of more than 2,600 federal programs sought by the budget office had raised widespread concerns about the impact.

Senate Appropriations Committee ranking member Patty Murray’s staff circulated a memo calling attention to their interpretation of key beneficiaries who could be affected, including disaster relief payments from North Carolina to California; money for communities to combat fentanyl addiction; Pell Grants; food stamps; cancer research; and Violence Against Women Act programs, among others.

The memo said a broad interpretation of the directive could affect “hundreds of billions of dollars in approved funding — sowing chaos nationwide, hurting American families and businesses, killing jobs, and undermining our national security and emergency preparedness.”

Some key Republicans expressed unease about the situation as well, at least before the clarifying comments from the White House.

“I think there is benefit in taking a look at federal spending to see if we can be more efficient, to identify duplicative programs,” Senate Appropriations Chair Susan Collins, R-Maine, said. “But this is far too sweeping and will have an adverse effect on the delivery of services and programs.”

After Murray, D-Wash., and other top Democrats called on the Senate Budget panel to hold up OMB director nominee Russ Vought until the pause is lifted, Budget Chairman Lindsey Graham said that wouldn’t happen and that his committee would vote on Thursday as scheduled.

But Graham, R-S.C., said he was looking for more information from the White House top brass.

“I’d like to know what the game plan is here, because some agencies like centers to help abused children, they rely on their grant money to meet their budget,” Graham told reporters. “I don’t mind reviewing things. I just want to find out what happened, and what’s the end game.”

Sen. Thom Tillis, R-N.C., had some concerns about the impact on disaster relief payments.

“When you talk about immediate disaster, immediate relief, I just can’t imagine they’re going to tap the brakes on that in California and some of these other ones,” he said. “Some of the other ones, I could, I could see an argument for pausing it. And then there’s, you know, the more fundamental question about whether or not there’s an authority to do this, but all of the lawyers and constitutional people figure that out.”

Sen. Jerry Moran, R-Kan., the Veterans Affairs panel chair, said he was trying to get more information about the impact on veterans grant programs, and that the agency’s leadership would meet with OMB officials to hash it all out.

Other Republicans were broadly supportive of the funding pause, such as Sen. Ron Johnson, R-Wis.

“I think it’s great that we’ve got an administration that is serious about providing oversight on government spending. It’s about time,” Johnson said. “I think people are overreacting. I think they’re not understanding what it does impact or what it doesn’t.”

For her part, Murray dismissed the White House clarification as unlikely to resolve the issue.

“Yeah, that’s nice from somebody up at the top. … But I’ll tell you what’s happening to every single agency, school, health care agency that got that memo is going to say, ‘I better be darn careful not to accidentally fund something that I’m not supposed to.’ So they stop everything,” she said. “That is exactly what’s happening. I don’t care what they put out in some kind of qualifying thing.”

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(CQ-Roll Call's Paul M. Krawzak, Michael Macagnone and John T. Bennett contributed to this report.)

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