Statesman Journal
Trump administration rescinds funding freeze. States pledge to proceed with lawsuits
Anastasia Mason, Salem Statesman Journal – January 29, 2025
(This story has been updated with new information.)
The Trump administration rescinded a federal grant freeze on Wednesday that Oregon leaders said caused confusion and chaos.
White House press secretary Karoline Leavitt said Trump’s other executive orders on federal funding issued since Inauguration Day will “remain in full force and effect and will be rigorously implemented by all agencies and departments.”
Oregon joined 22 other states and Washington, D.C. in filing a new suit, Attorney General Dan Rayfield announced Tuesday afternoon. The states’ request for a preliminary injunction will be considered Wednesday afternoon in Rhode Island.
Leavitt said the administration’s rescission “should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending.”
However, Jenny Hansson, spokesperson for Rayfield’s office, said “everything is still on. We’re suing to stop these actions, and given the chaos of recent days we don’t trust the administration when it says it’s going to stop these actions. Also, as a legal matter, voluntarily ceasing conduct doesn’t moot out a lawsuit.”
The states intend to seek “permanent injunctive and declaratory relief, to ensure that their residents are protected against the damage and chaos that would be caused by the funding freeze,” Rayfield’s office said in a press release.
A federal judge issued a temporary halt Tuesday afternoon on the Trump administration’s efforts to pause some federal funding.
Disbursement of federal grants and loans to Oregon were scheduled to stop at 5 p.m. Tuesday and remain paused for review, as directed by the Trump administration.
U.S. District Judge Loren AliKhan ordered the Trump administration not to halt grant funding until at least Feb. 3, when another hearing will be held on the dispute.
The judge said her temporary ruling was intended to “maintain the status quo.” It does not block the Trump administration from freezing funding to new programs, or require it to restart funding that has already ended.
The announcement of the pause order led to “chaos and uncertainty” and impacted the state’s federal reimbursement portals for programs such as Medicaid and Head Start, said Gov. Tina Kotek, who urged Oregonians to continue using the services as usual.
“This does not impact you today. This is about how money is coming back to the state to pay for the services that you’re using, but do not delay care,” Kotek said during a joint press conference with Rayfield.
“There is complete confusion right now from the Trump administration about what they’re doing and what it means for Americans across the country,” the governor said.
Rayfield said: “What we’re hearing from the White House is not what we’re experiencing on the ground.”
In a statement earlier Tuesday Rayfield said he was “deeply concerned” by the pause and “will explore any and all legal actions to challenge this harmful order from President Trump.” He said the DOJ’s child support portal also was affected.
Last week, Oregon joined suit with three other states against an executive order by President Donald Trump that would end birthright citizenship. A judge issued a temporary pause on the order.
U.S. Rep. Andrea Salinas, D-Oregon, condemned the pause, saying, “if the president gets his way, children and seniors will go hungry, parents will pay more for child care, small businesses won’t be able to meet payroll, veterans will lose access to housing and health care, and rural communities won’t get the relief they need to prepare for and recover from wildfires and other disasters.”
Sen. Jeff Merkley, D-Oregon, criticized what he called a “cruel order” saying it was “blatantly unconstitutional.”
“The president is not a king, and the laws Congress passes are not suggestions,” Merkley, a ranking member of the Senate Budget Committee, said in a statement. “This cruel order will force schools, hospitals, food banks, and other community organizations to stop offering vital services. The list goes on and one thing is remarkably clear: President Trump’s Great Betrayal of working families knows no limit.”
Memo directing federal agencies to pause federal financial assistance
The White House Office of Management and Budget issued a memo Monday directing federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance,” Reuters reported.
The purpose of the pause is so agencies can “review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities,” the memorandum reads.
The memo pointed to a legal definition of federal financial assistance, which includes grants, cooperative agreements, surplus donations, loans and interest subsidies. It exempts assistance received directly by individuals, including Medicare and Social Security benefits.
In a post on X, U.S. Sen. Ron Wyden, D-Oregon, reported issues with Medicaid access.
“My staff has confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze. This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed,” the post said.
Asked whether Medicaid was cut off as part of OMB’s funding pause and whether there was a guarantee that individuals on Medicaid would not be affected, White House spokesperson Karoline Leavitt said: “I’ll check back on that and get back to you.”
“This is not a blanket pause on federal assistance and grant programs from the Trump administration,” Leavitt said during a briefing Tuesday. “The reason for this is to ensure that every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken.”
Ways and Means co-Chair Sen. Kate Lieber, D-Beaverton, issued a statement that said: “We have a long history of partnering with the federal government to the betterment of all Oregonians and it is unconscionable for the current administration to play politics with people’s lives.”
“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,” the memo says.
The memo refers to an executive order Trump signed on Jan. 20, which ordered department and agency heads to “immediately pause” new programs and disbursements of development assistance to foreign countries. The Department of State announced the pause on Sunday.
On the domestic side, the federal government issues grants for everything from road building to scientific research.
It was unclear which categories would be affected. While the directive is broad, including all federal financial assistance, the memo also includes a caveat that the pause can only affect federal assistance “to the extent permissible under applicable law.”
USA TODAY and Reuters contributed to this report.