Trump Tries to Reverse Engineer the Social Safety Net With Funding Freeze
The order is far-reaching, from health-care policies to low-income energy assistance

President Donald Trump speaks at the 2025 House Republican Members Conference Dinner on January 27. | Photo by Mark Schiefelbein/AP
Donald Trump has moved at a blistering pace since returning to the White House last week for his second term as president. One of his most consequential moves thus far came with a Monday-evening memorandum from the Office of Management and Budget, a somewhat obscure but important part of the executive branch (its offices are literally across the street from the White House).
The memo instructed all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance” so that such funding—which totals about $3 trillion—can be reviewed to see if it is in line with the Trump administration’s priorities and agenda.
The notice said that agencies had to end all funding activities by 5 p.m. on Tuesday. Shortly before that deadline, a Washington, DC, district court judge blocked the move, all but ensuring a protracted legal fight in the days to come.
Below, we’ve tried to clarify some of the confusion surrounding the order.
What does the OMB memo say, exactly?
Issued on Monday evening by acting Office of Management and Budget director Matthew J. Vaeth, the guidance calls for the elimination of “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
Wait, we did the Green New Deal?
No, the sweeping climate plan introduced by Representative Alexandria Ocasio-Cortez (D-N.Y.) and Senator Ed Markey (D-Mass.) embraced by many progressives has never been passed by Congress. Trump seems to be signaling a complete break with the Biden administration when it comes to funding implementation of electric vehicles, keeping public lands like the Arctic National Wildlife Refuge free of extractive industries, and protecting threatened and endangered species.
In his first days in office, Trump has moved to purge the federal bureaucracy of diversity, equity, and inclusion, or DEI, initiatives, indicated that the United States will leave the Paris climate accords, and rolled back efforts at giving transgender people protections and visibility.
The new guidance seemed like a warning that the new president was serious about his plans. And though he had promised similar action during his run for the presidency, many were nevertheless caught off guard.
“This sort of came out of the blue,” a Kansas education official told the Associated Press.
What kind of practical effects would such a freeze have?
That was the question everyone in Washington was trying to answer on Tuesday afternoon.
“Very unclear right now,” Raymond Rodriguez, a spokesman for Representative Mike Levin (D-Calif.), told Sierra. But as things became clearer, alarm spread.
Crackerjack reporting from The New York Times revealed that an astonishing 2,600 programs would be affected, from services for the hard of hearing to a $24 million grant to help law enforcement agencies buy bulletproof vests. At least 40 programs that explicitly address environmental concerns would come under the axe, as well as seven explicitly earmarked for national parks.
Huge education programs seemed to be in trouble. Nobody was sure what was going to happen to the $369 billion in the Inflation Reduction Act, which Congress passed and Joe Biden signed into law in 2022.
Kurt Repaneshek, editor of National Parks Traveler, predicted that the freeze would devastate Interior Department initiatives, “from tribal assistance programs and climate resilience projects to cultural resources management and threatened and endangered species programming.” About $1.5 billion in wildlife and fish restoration funds that were supposed to be disbursed by the US Fish and Wildlife Service were also imperiled.
Such stories were plentiful on Tuesday, since the guidance seemed to touch about every nook and cranny of the federal bureaucracy. And the language of the guidance was broad enough to give Trump administration officials plenty of cover to act without an abundance of caution.
A project to study the production of small electric vehicles, which stood to receive $750,000 from the federal government, found itself in trouble. A scientist at the University of Indiana received notice that his State Department grant to study air pollution in Pakistan had been suspended. Museums worried they would lose funding.
A lot of this stuff doesn’t seem all that “woke.”
No, it doesn’t. The Trump administration clearly has strong disagreements with its predecessor on how to address racial inequality and other entrenched social problems, as well as climate challenge. But the freeze seemed to go well beyond that, with the potential to hurt many people—including plenty of the president’s own supporters.
For example, according to the Times database, the Low Income Home Energy Assistance Program, or LIHEAP, which helps people stay warm during the winter, would lose $4.1 billion; the Uniformed Services University Medical Research Projects, which trains medical personnel for the military, would lose $463 million; fisheries would lose $373 million in disaster relief. Disaster Unemployment Assistance—a program that has provided financial aid since 1970 to people who have lost their jobs because of a disaster—and funding to ensure people have access to clean water—through EPA programs such as the Clean Water State Revolving Fund and Drinking Water State Revolving Fund—would be slashed.
How has the Trump administration justified its actions?
During her first press briefing on Tuesday afternoon, new White House press secretary Karoline Leavitt pushed back against mounting criticism and confusion. “This is not a blanket pause on federal assistance in grant programs from the Trump administration,” Leavitt said. “Assistance that is going directly to individuals will not be impacted by this pause,” she added. In other words, programs like Social Security, Medicare, and Medicaid would be untouched.
OK, but I learned in civics class that Congress appropriated taxpayer funds.
Your civics teacher was right! During the budgeting process, known as appropriations, Congress decides how to fund each aspect of the federal government: every office in every agency, as well as the downstream nonprofits, nongovernmental organizations, and other groups that work with and rely on the federal government.
However, presidents starting with Thomas Jefferson have used a process called “impoundment” to effectively keep funds appropriated by Congress from flowing. Richard Nixon was such a fan of impoundment that Congress passed a law, the Impoundment Control Act, which formalized the budgeting process in a way that would make it more difficult for the president to hijack.
So … doesn’t that make what Trump just did illegal?
You would think so—and Tuesday evening’s judicial stay would certainly suggest as much. But in truth, nobody really knows. “I can't tell how bad it is yet,” progressive strategist Karthik Ganapathy told Sierra in a text message. “Obviously not good that this is what the WH wants to do, but unclear what will actually happen or be allowed to happen by external checks, and even what they will walk back themselves.”
Still, this seems like quite a curveball.
Yes. And some in Washington are using less polite words than that. During the first Trump term, there was plenty of chaos, but also the feeling that the administration was making terrific noise but not actually enacting the radical changes it had promised. This time around, the change has come fast, reflecting the second Trump administration’s familiarity with how the government works—and the conviction, whether justified or not, that Americans are behind him this time around.
Democrats have been left reeling—and fuming. “They have no idea what they are doing,” says Neera Tanden, a former White House domestic policy adviser. “It's an unconstitutional shutdown of government services. Programs live hand to mouth here. Some could close.”
But then the freeze got frozen.
Correct. On Tuesday afternoon, a bevy of nonprofits sued the Trump administration, arguing that the OMB guidance was “devoid of any legal basis or the barest rationale” and would have a “devastating impact on hundreds of thousands of grant recipients.” (Democratic attorneys general filed their own suit.)
And the courts agreed.
Yes, for now.
Shortly before the pause was to go into effect, US District Judge Loren AliKhan agreed with the nonprofits. “I think there is the specter of irreparable harm,” she said.
I’m pretty sure this isn’t over.
Right again. Trump is challenging a core concept of American government. Don’t be surprised if this ends up at the Supreme Court.