Trump’s Blatantly Illegal Funding Freeze Causes Nationwide Chaos

In case you’ve forgotten, the 47th president loves chaos. Photo: Andrew Harnik/Getty Images

An Trump administration order freezing trillions of dollars in federal spending set off nationwide panic and chaos until a federal judge in Washington put a hold on its implementation pending a hearing on its legality on February 3.

Here’s how it all happened: The acting director of the Office of Management and Budget issued a memo on Monday “pausing” all federal grants and loans until at least February 10 to ensure they comply with Donald Trump’s worldview.

Written in MAGA-speak, the memo from Matthew Vaeth (who is running OMB pending confirmation of Trump nominee Russell Vought) demanded that a vast number of programs and services financed by the federal government come to a halt until it can be determined that they don’t promote “Marxist equity, transgenderism, and green new deal social engineering policies.”

The “pause” said it would specifically exempt Social Security and Medicare payments and purports not to cover funds “provided directly to individuals.” Since a lot of federal low-income programs (notably Medicaid, which is where a fifth of the U.S. population obtains health care and/or nursing home assistance) benefit individuals but are administered by the states under a federal grant, there was immediate confusion about these vital services. States reported the federal portal for obtaining Medicaid payments had been abruptly closed. A subsequent OMB memo sent out the day after the initial bombshell answered some questions but raised others:

In addition to Social Security and Medicare, already excluded in the guidance, mandatory programs like Medicaid and SNAP [food stamps] will continue without pause.

Funds for small businesses, farmers, Pell Grants, Head Start, rental assistance, and other similar programs will not be paused.

It’s anybody’s guess what “other similar programs” means, and there is additional confusion caused by language that suggests any program that doesn’t run afoul of Trump’s recently announced policies should be kosher.

In any event, the action appears to blatantly violate the Impoundment Control Act of 1974, which authorizes limited delays in the disbursement of congressionally appropriated funds only if they are specified and explained in detail in a formal notification to Congress. None of that happened in this place; the OMB memo came out of nowhere, though it did follow earlier efforts by presidential executive order to freeze foreign aid and energy disbursements that weren’t already in the pipeline.

So this latest move is almost certainly a prelude to an assertion that Trump has the right not only to delay but to “impound” (i.e., cancel) congressionally appropriated dollars whenever he imperially wills it. The aforementioned Impoundment Control Act was enacted by Congress after Richard Nixon abused the president’s power to delay or slightly modify appropriated dollars. Russell Vought has regularly asserted that this action by Congress was, in fact, unconstitutional. So other than striking terror in the hearts of “deep state” bureaucrats and Democratic-leaning poor people, the purpose of the “pause” is probably to create a Supreme Court test of Vought’s hypothesis.

The road to that legal confrontation was probably begun by the stay issued literally minutes before the freeze was to take effect by D.C. District Court Judge Loren AliKhan at the request of a group of non-profit organizations who receive federal grants. Judge AliKhan, a Biden appointee (whose confirmation required a tie-breaking vote from Kamala Harris because of her support for COVID restrictions on religious gatherings), has scheduled a hearing next Monday on the effects and implications of the administration’s action. Her order applies to disbursements of funds from grants already awarded in order to address interruptions of ongoing programs.

Presumably the constitutional question about the Impoundment Control Act will be resolved by a Supreme Court that is very friendly to Trump but would have to overturn its own precedents and upset the settled consensus of nearly every constitutional expert outside the administration itself to succor him in this case. Letting Trump delay or cancel any appropriation he doesn’t like really would abolish Congress’s constitutionally enumerated spending power, and give the president the kind of power only true dictators enjoy. But even if this gambit fails, in the meantime, chaos will lurk around every corner, and Trump’s reputation as a disrupter will reach a new and lofty level.