The White House on Tuesday defended the Trump administration’s decision to freeze all loans and grants disbursed by the federal government, a move which has caused confusion about the fate of trillions of dollars in funding.
“This is a very responsible measure,” White House press secretary Karoline Leavitt told reporters in Washington, adding: “It’s incumbent upon this administration to make sure, again, that every penny is being accounted for honestly.”
The White House is pausing federal grants and loans starting Tuesday, as Trump’s administration begins an across-the-board ideological review of its spending, causing confusion and panic among organizations that rely on Washington for their financial lifeline.
Administration officials said the decision was necessary to ensure that all funding complies with Trump’s executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts. They also said that federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.
However, the funding freeze could affect trillions of dollars, at least temporarily, and cause widespread disruption in healthcare research, education programs and other initiatives. Even grants that have been awarded but not spent are supposed to be halted. State agencies and early education centers appeared to be struggling to access money from Medicaid and Head Start, stirring anxiety with answers hard to come by in Washington.
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.” The pause on grants and loans was scheduled to take effect at 5 pm ET (11 pm Paris), just one day after agencies were informed of the decision.
Medicaid online portals down
Online portals used to access the US Medicaid health insurance program for low-income families have been blocked after Trump ordered federal agencies to temporarily suspend “all federal financial assistance.”
“My staff has confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze,” Oregon Senator Ron Wyden posted on X.
“This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed,” he added.
Similar complaints were raised by other Democratic lawmakers and state-level officials, including US Senator Brian Schatz of Hawaii, who said “multiple” states were locked out of the Medicaid portal as part of an “unlawful” Trump shutdown.
US Senator Chris Murphy of Connecticut said his state’s Medicaid payment system had been “turned off,” and that doctors could not get paid. “Medicaid covers health care for millions of seniors and covers 40 percent of births in America,” he said.
Leavitt commented on the situation on X: “The White House is aware of the Medicaid website portal outage. We have confirmed no payments have been affected – they are still being processed and sent.”
“We expect the portal will be back online shortly.”
Trump’s White House freeze – potentially halting trillions of dollars in federal spending – was due to take effect Tuesday afternoon and quickly sparked accusations that he is violating the constitution. It was not clear how the directive, issued Monday by acting director of the Office of Management and Budget (OMB) Matthew Vaeth, would work or how long it would last.
Court battles are imminent, and Democratic attorneys general announced a lawsuit asking a federal judge to block the Republican president’s moves.
“There is no question this policy is reckless, dangerous, illegal and unconstitutional,” said New York Attorney General Letitia James, who added that the funding freeze is already hurting vital programs. Her California counterpart, Rob Bonta, said he fears the move will affect money for wildfire recovery. And Peter Neronha in Rhode Island described the pause as “a ham-handed way to run a government.”
Zelensky on suspended US funds
Ukrainian President Volodymyr Zelensky on Tuesday said that multiple humanitarian projects had suspended operations due to the US freeze on foreign aid and that Kyiv would replace funding where possible.
“Today I instructed government officials to report on those US support programs that are currently suspended. These are humanitarian programs,” Zelensky said in his evening address.
“There are many projects. We will determine which of them are critical and need solutions now. We can provide part of this funding through our public finances,” the Ukrainian leader added.
“We will definitely support the priority items, those that concern Ukrainian children, our veterans, and programmes to protect our infrastructure.”
Ukraine has become extremely dependent on foreign aid for humanitarian work since Russia’s invasion began in February 2022, with the United States providing billions of dollars of support.
