A federal judge has temporarily blocked a Trump administration freeze on federal grants and loans that could total trillions of dollars.
U.S. District Judge Loren L. AliKhan blocked the action Tuesday afternoon, minutes before it was set to go into effect. The administrative stay pauses the freeze until Monday.
The White House had planned to start the pause as they begin an across-the-board ideological review of federal spending.
The plan sparked confusion and panic among organizations that rely on Washington for their financial lifeline.
Administration officials have said federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.
ORIGINAL STORY:
Nevada lawmakers are responding to the White House announcing it is pausing federal grants and loans.
Senate Majority Leader Nicole Cannizzaro and Assembly Speaker Steve Yeager say the freeze could have a huge impact on services widely used by Nevadans. The freeze could also impact Nevada’s state budget, just a few days after the Lombardo administration proposed a budget with a $335 million deficit. The leaders say federal funding accounts for more than one third of Nevada’s budget, as well as funding many services offered by local governments, the court system, and local nonprofits.
The freeze would affect several services including Medicaid coverage for more than 800,000 Nevadans, school meals, and Head Start.
Governor Joe Lombardo issued the following statement on X:
"The Office of the Governor is in communication with the White House and will participate in a larger meeting with the Office of Management and Budget to discuss the potential impacts to state agencies. While these discussions are ongoing, it's important to reiterate that programs that provide direct benefits to Nevadans - like Medicaid, Medicare, SNAP, and Head Start - are continuing without interruption. Despite the shameless political theater on this issue, the Office of the Governor will continue to provide state agencies and Nevadans with timely, accurate, and correct information."
Majority Leader Cannizzaro and Speaker Yeager made the following statement:
“Trump’s funding freeze will cause massive confusion for Nevada families, delay delivery of vital services in health care and education, and could plunge our state budget into further chaos. As a state, we cannot afford to sit quietly while the Trump administration recklessly damages programs Nevadans depend on every day. The Governor’s office must demand answers from the federal government and a reversal of this decision while providing the Legislature a full accounting of all affected state programs and services.”
Senator Jacky Rosen (D-NV) issued the following statement:
“President Trump’s freeze on federal grants and funding has jeopardized key programs that many Nevadans rely on,” said Senator Rosen. “Because of this freeze, there is now chaos and confusion about the status of critical funding needed to support local law enforcement, veterans, businesses, widely used housing programs, and others. Make no mistake, I will fight back against this unconstitutional action and work to ensure that Nevada’s federal funding resumes to continue benefiting Nevadans.”
Administration officials said the decision was necessary to ensure that all funding complies with Trump's executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.
They also said that federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps and other such programs.
However, the funding freeze could affect trillions of dollars, at least temporarily, and cause widespread disruption in health care research, education programs and other initiatives. Even grants that have been awarded but not spent are supposed to be halted. State agencies and early education centers appeared to be struggling to access money from Medicaid and Head Start, stirring anxiety with answers hard to come by in Washington.
The University of Nevada tells 2 News Nevada that the president's memo does not apply to federal student loans, Pell grants and federal work-study programs.
"University of Nevada, Reno leadership is monitoring the Presidential Executive Actions closely. The situation is still fluid, and it is not quite readily apparent what the long-term implications will be. Attached (below) is a message from President Brian Sandoval sent to faculty, staff and students on Jan. 24."
The issue dominated the first briefing held by White House press secretary Karoline Leavitt. She said the administration was trying to be “good stewards” of public money by making sure that there was "no more funding for transgenderism and wokeness.”
Court battles are imminent, and Democratic New York Attorney General Letitia James plans to ask a Manhattan federal court to block the Republican president's moves.
“My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding,” she said on social media.
The pause was scheduled to take effect at 5 p.m. ET, just one day after agencies were informed of the decision.
“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” wrote Matthew Vaeth, the acting director of the Office of Management and Budget.
Democrats and independent organizations swiftly criticized the administration, describing its actions as capricious and illegal because Congress had already authorized the money.
Our Office is aware of the Trump Administration’s intent to halt federal assistance programs. Any pause to critical funding will harm Nevadans, weaken public safety and negatively affect programs like Medicaid and SNAP.
— NV Attorney General (@NevadaAG) January 28, 2025
We’re prepared to fight against this ill-conceived idea.
“The scope of this illegal action is unprecedented and could have devastating consequences across the country," said Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee. "For real people, we could see a screeching halt to resources for child care, cancer research, housing, police officers, opioid addiction treatment, rebuilding roads and bridges, and even disaster relief efforts.”
Senate Minority Leader Chuck Schumer, a Democrat from New York, called it “more lawlessness and chaos in America.”
It's unclear from the White house memo how sweeping the pause will be. Vaeth said all spending must comply with Trump's executive orders,
Vaeth wrote that “each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders." He also wrote that the pause should be implemented “to the extent permissible under applicable law.”
Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they will be affected.
The pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he's reaching deep into the bureaucracy.
“They are pushing the president’s agenda from the bottom up," said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.
He also said there are risks in Trump's approach, especially with so many voters reliant on Washington.
“You can’t just hassle, hassle, hassle. You’ve got to deliver.”
(The Associated Press contributed to this report.)
