After Day of Chaos, Judge Blocks Trump’s Attempt to Freeze Federal Funding Over ‘Marxist Equity’ & ‘Transgenderism’

On Monday night, the Trump administration’s Office of Management and Budget decided to throw the nation into chaos. The office announced they’d be suspending federal grants and loans for key programs—until the threat of communism (??) and or “transgenderism” (???) is sufficiently expunged from a range of crucial programs. The freeze was meant to go into effect at 5 p.m. ET on Thursday. Then, a federal judge ultimately blocked the freeze minutes before the clock struck 5, about 20 hours before House Democrats’ “emergency” meeting was scheduled for Wednesday—but not before the entire country was thrown into chaos.

“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,” OMB acting director Matthew Vaeth wrote in an initial memo “explaining” the order on Monday. As some have raised, under the Impoundment Control Act of 1974—which prevents the president from blocking funding that’s already been appropriated and directed by Congress—this all seems pretty illegal. The act was passed after Nixon tried to veto the Clean Water Act; Congress overrode his veto, but he still refused to devote the $24 billion in federal funds allocated to clean up water systems.

Similarly, federal funding for programs like Medicaid, Meals on Wheels, SNAP, Section 8, and Pell Grants were already allocated and approved under the most recent spending bill—so technically, Trump shouldn’t be able to override that.

Nonetheless, as we debate the constitutionality of this frankly insane turn of events, those programs were thrown into a state of limbo, with Congress members reporting frantic and confused calls from constituents, as well as aid organizations that serve their communities. Around 2 p.m., about the time the Trump administration denied that Medicaid would be impacted, Medicaid access portals were reportedly shut down in all 50 states.

OMB memo sent to me appears to suggest a pause on basically all federal assistance starting tomorrow at 5. Is there another way to read this? pic.twitter.com/ljkoQzRAyH

— Sam Stein (@samstein) January 28, 2025

The deliberately ambiguous memo further stated that in order to ensure Trump’s executive orders are met, “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.” Until such time, “to the extent permissible under applicable law, Federal agencies must temporarily pause all activities” that rely on financial assistance, as well as any other relevant agency activities that involve, among other things, foreign aid, “DEI, woke gender ideology, and the green new deal.”

As Rep. Alexandria Ocasio-Cortez (D-NY) pointed out, 41% of all births in the U.S. are covered by Medicaid; she called the OMB’s actions “illegal sabotage.” Without crucial federal funding, states could lose disaster aid, low-income people could lose housing, and rural hospitals and health centers could shutter; vital employees providing these services could immediately be laid off. This is the tip of the iceberg—and all just seemingly to fearmonger about “Marxist” government workers (???) who help deliver meals to seniors and schoolchildren, or trans people who might rely on public housing. The GOP response has ranged from House members like Rep. Nicole Malliotakis of New York pretending they haven’t seen the directive to other members like Rep. Rich McCormick of Georgia suggesting that maybe kids should get jobs if they want to eat lunch. (McCormick told CNN that he, personally, “worked [his] way through high school” and was “picking berries in the field” at 13.) 

Karoline Leavitt, Trump’s 27-year-old press secretary, then made her briefing room debut and held a predictably unhelpful press conference, where she spent 47 minutes dodging questions, maintaining that Medicaid wouldn’t be impacted even as portals shut down, and ultimately leaving everyone more confused than before.