On Wednesday, the Trump administration rescinded the freeze on federal assistance. Click here for the latest details.

(NewsNation) — A federal judge has temporarily blocked the Trump administration’s attempt to temporarily pause grants, loans and other federal financial assistance, according to The Associated Press.

The administration’s directive was sent out in a vaguely worded memo Monday and set off confusion among the many groups that depend on federal funds.

Federal judge blocks Trump’s funding freeze

Tuesday’s action from U.S. District Judge Loren L. AliKhan, which came just minutes before the freeze would take effect, will pause it until Monday.

The administrative stay applies to only existing programs.

Monday’s memo from the acting director of the Office of Management and Budget (OMB), Matthew Vaeth, instructed federal agencies to temporarily pause “all activities related to obligation or disbursement of all Federal financial assistance.”

Vaeth’s directive was light on specifics but clarified that federal assistance to individuals, like Social Security and Medicare, would not be impacted. Instead, the memo said it’s intended to make sure federal funding is aligned with Trump’s recent 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,” Vaeth wrote.

The pause, which was set to take effect Tuesday at 5 p.m. ET, would’ve affected trillions of dollars, potentially disrupting health care research, education funding and other such programs.

The memo called on agencies to submit “detailed information on any programs, projects or activities subject to this pause” to OMB by February 10.

Who will be affected by the federal grant pause?

The funding pause could affect trillions of dollars, but it’s still unclear which programs will be impacted and how.

Diane Yentel, CEO of the National Council of Nonprofits, said the order could be devastating for groups that depend on federal funding, hurting communities in red and blue states.

“We’re talking about potentially shuttering shelters for survivors of domestic violence, or homeless shelters, pausing child care assistance,” Yentel said. “The list really goes on and on.”

Yentel said OMB sent out a survey to some 2,600 programs asking for details to “essentially justify spending.”

“It’s a massive scale and scope that’s being contemplated under this order,” she said.

Vaeth’s memo says OMB may grant exceptions that allow Federal agencies to “issue new awards” or “take other actions” on a “case-by-case basis” but didn’t go into specifics.

“The vague and contradictory language makes it hard to know if funding is imperiled for public schools, community health centers, state and local law enforcement, veterans’ housing, health care through Medicaid, public services on tribal lands, etc,” wrote Sharon Parrott, president of the Center on Budget and Policy Priorities, a left-leaning think tank.

In a follow-up on Tuesday, OMB clarified that mandatory programs like Medicaid and SNAP would continue without pause.

“Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused,” OMB said.

Parrott said the handful of exemptions doesn’t provide enough clarification and still leaves the status of “thousands of others unclear.”

OMB said the pause would not apply “across-the-board” but is limited to “programs, projects, and activities implicated by the President’s Executive Orders” such as “ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”

A senior defense official shared the following statement with NewsNation:

“As directed by the memorandum, the Department will expeditiously analyze its financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders. In the interim, and as directed by OMB, the Department will temporarily pause activities related to the obligation or disbursement of financial assistance, to the extent permissible under applicable law.”

The official clarified that, contrary to reports, the memo does not impact contracts.

“The Department continues to award new contracts to fulfill validated mission needs. While we are not aware of any specific contracts or other activities affected, it is possible that activities may be paused if they are determined to fall within the bounds of the guidance,” the statement continues.

In fiscal year 2021, $2.8 trillion in federal funding was distributed to states, communities, tribal governments and other recipients using Census Bureau data.

Some of the top federal assistance programs funded health care, nutrition, highways, housing, school lunches, child care and COVID-19 assistance.

The federal budget provides about 30% of state revenue, making it the single largest source of revenue in many states, according to the Federal Funds Information for States (FFIS).

Will Social Security and Medicare be impacted by the federal grant pause?

The memo says that federal assistance to individuals won’t be affected, meaning Social Security, Medicare, food stamps and other such programs won’t change.

“Nothing in this memo should be construed to impact Medicare or Social Security benefits,” Vaeth wrote.

However, Medicaid, the health care program for low-income people and families, is reportedly having issues.

“My staff has confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze,” Oregon’s senior U.S. senator, Democrat Ron Wyden, wrote on X.

The White House said it was aware of the Medicaid website portal outage and said it should be back online shortly.

“We have confirmed no payments have been affected — they are still being processed and sent,” White House press secretary Karoline Leavitt wrote on X Tuesday afternoon.

What about disaster relief funding?

Yentel said the directive could impact funding for disaster relief, hurting communities that are trying to bounce back after Hurricane Helene and the recent wildfires in the Los Angeles area.

“The pain and the harm from this order would be broad and deep,” Yentel said.

Leavitt would not specifically say whether disaster aid would be frozen during Tuesday’s briefing, Reuters reported.

Sen. Thom Tillis, a Republican whose state of North Carolina is recovering from tropical storms, told The Associated Press, “I can’t imagine that the president would knowingly cut off housing assistance for people displaced from their homes so we’ve just got to sort through it and see how they ultimately implement it.”

Other organizations, like Meals on Wheels, which receives federal money to deliver food to the elderly, are worried about getting cut off.

The uncertainty is “creating chaos” for community entities providing meals, “which unfortunately means seniors may panic not knowing where their next meals will come from,” a spokesperson for Meals on Wheels America told Reuters.

Will the federal grant pause impact student loans?

The Education Department said the temporary pause does not impact assistance received directly by individuals, therefore students who rely on federal financial aid to cover tuition and other costs aren’t expected to see any disruptions.

“Title IV, HEA funds that are provided to individual students, such as Federal Pell Grants and Direct Loans, are not impacted by yesterday’s guidance,” Madi Biedermann, spokesperson for the U.S. Department of Education, told NewsNation.

More than 40 million Americans have federal student loans, and about 7 million students receive Pell Grants each year in the United States.

The Association of American Universities (AAU), composed of roughly 70 research universities, said a temporary stoppage of critical scientific research would be “a self-defeating, unforced error.”

“We are extremely concerned about the impact of this action on our country’s ability to maintain its scientific and technological lead against competitors and potential adversaries,” AAU president Barbara R. Snyder said in a statement.

Will the federal grant pause go into effect?

The pause was scheduled to take effect at 5 p.m. ET on Tuesday, but a federal judge has temporarily blocked the freeze.

New York Attorney General Letitia James had also planned to ask a Manhattan federal court to intervene.

“My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding,” James wrote on social media Tuesday.

Other states joining the suit are California, Illinois, New Jersey, Rhode Island and Massachusetts, according to The New York Times.

Arizona Attorney General Kris Mayes announced Tuesday evening she will join the multistate lawsuit, claiming the freeze would “immediately jeopardize state programs that provide critical health and childcare services to families in need, deliver support to public schools, combat hate crimes and violence against women, provide life-saving disaster relief to states, and more.”

Massachusetts Attorney General Andrea Joy Campbell, a Democrat, called Trump’s directive “a reckless abuse of power.”

“This will hurt families. We’re exploring prompt action to stop it,” Campbell said on X.

What are Democrats saying about the federal grant pause?

Democratic lawmakers called the order unconstitutional and pointed out that Congress had already approved the funding.

“The blast radius of Trump’s terrible, unconstitutional, and illegal decision to halt virtually all federal grants and loans is virtually limitless,” Senate Minority Leader Chuck Schumer, a Democrat from New York, wrote on X.

Sen. Elizabeth Warren said the order will hurt organizations that help veterans with transitional housing and could mean some veterans get evicted.

“We do not consent to this lawless power grab,” the Massachusetts Democrat wrote on X.

“I pray that this gets reversed, that whoever on the President’s team told him to do this, that the President realizes this is this is not something that that person should have told him to do. Maybe he’ll ask them to do something different. This is very concerning,” Sen. Ben Ray Juan, D-N.M., said Tuesday.

A senior Trump administration official told NewsNation that the order is not a funding freeze but rather guidance for agencies to review to make sure they’re compliant with the executive orders.

The official said if the activity isn’t in conflict with the President’s priorities, it will continue with no issues.

Freeze is ‘institutional battle’ over impoundment: Mulvaney

NewsNation political and economic contributor Mick Mulvaney, who served as the former director of the Office of Management and Budget under Trump, told “Elizabeth Vargas Reports” the administration’s blocked attempt to freeze federal funding for grants, loans and other financial assistance is about impoundment.

“This is an institutional battle between the executive branch and the legislative branch,” Mulvaney says.

The Impoundment Control Act of 1974 established “procedures to prevent the President and other government officials from unilaterally substituting their own funding decisions.”

Essentially, it prevents the president from not spending money that has been appropriated by Congress.

“If Congress says that you have to spend $100, you have to spend $100,” Mulvaney explained. “And this administration is taking the position that says, ‘No, we can’t spend more than $100. If we want to spend $92, we should be able to do that.”

The Associated Press contributed to this report