Volkswacht Bodensee - Trump federal spending freeze sparks confusion, fury

It was Trump's latest radical step since he took office a week ago, vowing to force the US government and its employees to back his right-wing political goals or face retribution.

Potentially trillions of dollars in federal grants, loans and other aid were frozen by the White House order set to take effect Tuesday at 5:00 pm (2200 GMT), casting a shadow over everything from education to small businesses.

Online portals used to access the Medicaid health insurance program for poor families and disabled individuals were quickly inaccessible.

"This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed," Oregon Senator Ron Wyden posted on X.

White House Press Secretary Karoline Leavitt said the website would be fixed soon and that "no payments have been affected."

She defended the drastic move as part of Trump's bid to make the government "good stewards of taxpayer dollars."

The freeze is not a "blanket" stop on spending, but a tool to check that "every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken," Leavitt said.

She said the temporary pause would not impact individual Americans but would instead target programs to weed out anything "illegal."

She listed as examples racial equality and climate change programs that Trump has vowed to eradicate -- and did not answer a question about whether Medicaid recipients would be cut off.

The extraordinary measure follows a similar freeze on most US foreign aid.

- Constitutional challenge -

The order, signed by acting director of the Office of Management and Budget (OMB) Matthew Vaeth, did not make clear how such a pause on disbursements of funding will work or for how long.

Several non-profit groups have filed suit in federal court seeking a temporary halt to the order until its legality is assessed.

Federal spending included more than $3 trillion in financial assistance like grants and loans in fiscal year 2024 -- all of which was approved by Congress.

Democrats accused Trump of usurping Congress' constitutionally mandated control over budget spending as part of a broader attempt to force the government to bend to his personal will.

This has included firing independent government watchdogs and several career prosecutors who were involved in an official probe of his attempts to overthrow the 2020 election.

The Trump administration says the funding stoppage is just a way to enforce compliance with the administration's policies.

This is "certainly within the confines of the law," Leavitt said, citing the White House legal team, and claiming Trump "has the power to fire anyone" in the administration.

- 'Sweeping halt' -

Democratic Senator Patty Murray called the White House spending order "a brazen & illegal move."

"The law is the law -- Trump must immediately reverse course, follow the requirements of the law, & ensure the nation's spending laws are implemented as Congress intended," she posted on X.

Another Democratic senator, Richard Blumenthal, said the "illegal" order will create "havoc" in medical and research facilities, which receive major government funding.

The White House memo stated that "federal agencies must temporarily pause all activities."

It stated that Social Security and Medicare benefits -- used by retirees -- were excluded from the pause.

Areas that might be impacted, it said, include "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal" -- references to racial equality and climate change programs that Trump has vowed to overturn.

The Sierra Club, an environmental organization, said the freeze could jeopardize funding for everything from disaster relief to home heating subsidies, safe drinking water programs, and the National Suicide Prevention Hotline.

"In issuing a sweeping halt to federal funding, grants and loans, Donald Trump has... immediately and significantly put Americans in danger," Sierra Club executive director Ben Jealous.

T.Suter--VB