Health care, Head Start and other programs in chaos as Trump freezes federal funding

It started with a brief, two-page memo from the Office of Management and Budget (OMB): To undo what the Trump administration would broadly define as “wokeness,” trillions of dollars of the federal government’s budget would be temporarily frozen until a “proper audit” was performed. 

“In the interim … Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” the memo read. 

Upon the release of the OMB memo, chaos erupted throughout government on the federal, state and local levels. For example, organizations that receive funding from Medicaid and Head Start found they could no longer access payment portals. Eventually, this was corrected and the White House claimed such programs were not supposed to be affected — though this came only after a federal judge ruled for a stay on the freezing of funds.   

“Any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process,” a “fact sheet” released by the White House explained. 

“In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.” 

However, Democratic leaders like Illinois Gov. J.B. Pritzker (D) said that the Trump administration was lying about the rescinding of funds, citing chaos he personally witnessed with state agencies. 

“This is a demonstration of cruelty against people who depend on us, working families who rely on federal assistance to pay their rent, people who need help paying their utility bills, parents who need critical programs like Head Start for quality affordable child care, and 3.5 million Illinoisans who get their health insurance through Medicaid,” Pritzker said at a press conference.

 “When our agencies reached out to the federal agencies, we literally were informed that they are not to speak with us.”

Minnesota Gov. Tim Walz (DFL) echoed such sentiments with his brand of confrontational progressivism: "This is not bold. It's not leadership. It's stupid, buffoonish, childish of exactly what they did." 

The scheme to halt the flow of funds from the federal government appears to have been cooked up by Trump’s nominee for OMB director — and Project 2025 architect — Russ Vought. “He wants to resurrect the practice of withholding congressionally appropriated funds known as impoundment, which violates federal law and Supreme Court precedent,” Dave Dayen of the American Prospect wrote. 

“In Vought’s opinion, the president has inherent authority as head of the executive branch to impound funds that differ from his policy viewpoints.” 

There’s also the question of how constitutional the funding freeze may be. A 1985 memorandum written by now-Supreme Court Chief Justice John Roberts clearly states that the president does not have the authority to override congressional spending once it has been passed into law. 

But Vought’s plan to throw a wrench into the mechanisms of the vaunted “deep state” may have proven too unpopular, even for his boss. Today, the Trump administration appeared to have rescinded the federal funding pause. However, White House Press Secretary Karoline Leavitt posted on social media that they were simply rescinding the OMB memo and that the freeze as the administration had outlined would continue. 

Still, a cloud of confusion hangs over the funding pause. "I can't cross-examine the Tweet," a federal judge said at the OMB freeze hearing.