Trump Administration Pauses All Federal Grants & Loans, Except Those To Individuals (Such As Medicaid/Medicare)

Spending federal monies is very important to the political acclaim of Michigan politicians.  They won't give up the gravy train without a serious fight:

Michigan AG Dana Nessel says she will sue to block Trump's federal funding pause
By Paul EganPaul Egan - January 28, 2025

LANSING — Michigan Attorney General Dana Nessel said she plans to file a lawsuit Tuesday to protect programs and "vital services" threatened by a federal funding pause ordered Monday by the Trump administration.

"My team is working at full speed today to discern what these orders mean and the extent of their immediate impacts, and request an immediate legal remedy to restore funding provided by Congress, require this administration to comply with the law, and to stop this absurd and unprecedented attack on these programs," Nessel said in a news release.

The administration of President Donald Trump temporarily paused grant, loan and other financial assistance programs at the Office of Management and Budget, under a memorandum issued Monday.

The memo specifically excluded from the pause "assistance received directly by individuals," including Medicare and Social Security, and also appeared to exclude state welfare payments to needy families, such as food stamps, which account for close to $5.5 billion in federal spending in Michigan.

But Nessel said in a news release it appeared payments under Medicaid could be impacted by the pause, as well as Head Start, which is a preschool program.

"We are receiving reports of critical impacts to significant programs many millions of Michiganders rely upon daily for vital services," Nessel said.

The White House Office of Management and Budget said in a follow-up memo Tuesday that neither Medicaid nor Head Start payments were covered by the pause, despite media reports that some states were having trouble accessing certain payments Tuesday. Nessel's office did not immediately respond to questions about why she believed Medicaid and Head Start payments were impacted by the pause.

The memo referenced executive orders, including those seeking to dismantle programs related to diversity, equity and inclusion (DEI), signed by President Donald Trump since he took office last week.

"In the interim, to the extent permissible under applicable law, 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 impacted 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," Matthew J. Vaeth, the acting director of the Office of Management and Budget, wrote in the memo.

The suspension goes into effect Tuesday, Jan. 28 at 5 p.m., according to the memo.

Agencies have until Feb. 10 to submit detailed information on any programs, projects or activities subject to the pause, the memo states. Michigan's 2025 budget totals about $81.2 billion, of which just under $33.9 billion, or 42%, comes from the federal government, according to the House Fiscal Agency.

But not all of that federal money has been paused.

By state agency, the biggest recipients of federal funding are the Department of Health and Human Services ($26.6 billion); the Michigan Department of Transportation ($2.3 billion); School Aid ($2.3 billion); and the Department of Labor and Economic Opportunity ($1.2 billion). Next are the Department of Lifelong Education, Advancement and Potential ($505.4 million) and the Department of Environment, Great Lakes, and Energy ($463.8 million).

"The potential impact is huge," said Bob Schneider, a senior research associate at the Citizens Research Council of Michigan. But it is quite possible the freeze applies to a more limited range of federal spending programs, he said, noting the qualifier in the memorandum "to the extent permissible under federal law."

Programs delivered through the states that are already provided for under federal law, such as Medicaid, may not be covered by the pause, Schneider said.

Senate Minority Leader Aric Nesbitt, R-Porter Township, criticized Nessel on X for proposing "another frivolous taxpayer funded lawsuit attacking President Trump’s agenda."

Earlier Tuesday, New York Attorney General Letitia James, a Democrat, said she plans to ask a Manhattan federal court to block the Republican president’s moves.

For a change, it wasn't a Hawaiian judge.  The National Council of Nonprofits got an injunction from a Pakistani-American female judge: U.S. District Judge Loren L. Ali Khan:

https://www.pbs.org/newshour/politics/federal-judge-halts-trump-freeze-on-federal-grants-and-loans-for-a-week

Federal judge halts Trump freeze on federal grants and loans for a week

Associated Press writers JoNel Aleccia, Moriah Balingit, Collin Binkley, Matthew Daly, Lisa Mascaro, Adithi Ramakrishnan, Amanda Seitz, Michael Sisak, Lindsay Whitehurst and Tammy Weber contributed to this report.

January 28, 2025

WASHINGTON (AP) — A federal judge on Tuesday temporarily blocked a push from President Donald Trump to pause federal funding while his administration conducts an across-the-board ideological review to uproot progressive initiatives.

The Trump administration plan plunged the U.S. government into panic and confusion and set the stage for a constitutional clash over control of taxpayer money.

The order from U.S. District Judge Loren L. AliKhan came minutes before the funding freeze was scheduled to go into effect. The administrative stay lasts until Monday afternoon and applies only to existing programs.

Administration officials said the decision to halt loans and grants — a financial lifeline for local governments, schools and nonprofit organizations around the country — was necessary to ensure that spending complies with Trump’s recent blitz of executive orders. The Republican president wants to increase fossil fuel production, remove protections for transgender people and end diversity, equity and inclusion efforts.

But a vaguely worded memo issued by the Office of Management and Budget, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services.

“This sort of came out of the blue,” said David Smith, a spokesperson for the Shawnee Mission School District in Kansas, one of countless districts that receive federal funding. Now they’re trying to figure out what it means “based on zero information.”

AliKhan, who was appointed by President Joe Biden, said in halting the freeze, “It seems like the federal government currently doesn’t actually know the full extent of the programs that are going to be subject to the pause.”

Jessica Morton, an attorney for the National Council of Nonprofits which brought the suit, said the group has tens of thousands of members around the country that could be affected.

“Our client members have reported being extremely concerned about having to shutter if there’s even a brief pause,” Morton said.

Justice Department attorney Daniel Schwei said the plaintiffs hadn’t identified anyone specifically who would lose funding right away if the pause does go into effect.

Trump administration officials said programs that provide direct assistance to Americans would not be affected, such as Medicare, Medicaid, Social Security, student loans and food stamps. They also defended the funding pause, saying Trump was following through on his promise to turn Washington upside down if elected to a second term.

However, the effects were being felt far from the nation’s capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, were worried about getting cut off.

“The lack of clarity and uncertainty right now is creating chaos,” spokeswoman Jenny Young said. She added that “seniors may panic not knowing where their next meals will come from.”

The National Science Foundation postponed this week’s panels for reviewing grant applications. Officials in Prichard, Alabama, feared they wouldn’t receive infrastructure funding to fix their leaking drinking water system. Republican leaders in Louisiana said they were “seeking clarity” to ensure nothing was “jeopardizing financial stability of the state.”

“Trump’s actions would wreak havoc in red and blue communities everywhere,” said Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee. “We are talking about our small towns, our cities, our school districts.”

The full scope of the administration’s review was spelled out in a 51-page spreadsheet sent to federal agencies and viewed by The Associated Press. Each line was a different government initiative, from pool safety to tribal workforce development to special education.

Officials were directed to answer a series of yes or no questions for every item on the list, including “does this program promote gender ideology?” or “does this program promote or support in any way abortion?” Responses are due by Feb. 7.

Trillions of dollars are potentially under review. Grants that have been awarded but not spent are also supposed to be halted if they might violate one of Trump’s executive orders.

“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, in a memo distributed Monday.

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.”

The pause on grants and loans was scheduled to take effect at 5 p.m. ET, just one day after agencies were informed of the decision.

Democrats described the Trump administration’s decision as capricious and illegal. They argued that the president had no right to unilaterally stop spending money appropriated by Congress.

New York Attorney General Letitia James planned to ask a Manhattan federal court to block the funding pause.

“There is no question this policy is reckless, dangerous, illegal and unconstitutional,” she said.

Separately, a group of nonprofit organizations filed a lawsuit in Washington saying that the funding pause is “devoid of any legal basis or the barest rationale.”

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.”

She denied that Trump was deliberately challenging Congress to establish his dominance over the federal budget.

“He’s just trying to ensure that the tax money going out the door in this very bankrupt city actually aligns with the will and the priorities of the American people,” she said.

The Environmental Protection Agency confirmed that it would implement the pause to “align federal spending and action with the will of the American people as expressed through President Trump’s priorities.” The Department of Energy also said it was conducting a review of its spending.

The funding 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.

For example, federal employees are being asked to report their colleagues if they try to continue diversity, equity and inclusion initiatives.

“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,” Light said. “You’ve got to deliver.”

Fears about interruption in government services were exacerbated as states reported problems with the Medicaid funding portal, where officials request reimbursement for providing healthcare to poor residents.

Democrats condemned the Trump administration, connecting the issue to the funding pause.

But Leavitt said the portal would be back online soon.

“We have confirmed no payments have been affected — they are still being processed and sent,” she posted on social media.

@10x25mm

Praise the Lord for the first step to getting government bureaucrats out of healthcare. 

What's the path to bypassing the swamp for those in genuine need?

Disabled children (for example) could thrive with a fully funded HSA card. The market would never be the same again.