Trump's order on funding freeze hits Medicaid, raises constitutional questions

The healthcare system for millions of low-income Americans and rafts of other programs were thrown into disarray Tuesday after President Donald Trump ordered a freeze on federal funding, a move opponents blasted as unconstitutional.

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 faced possible suspension by the White House order, but a federal judge halted the order shortly before it was to take effect Tuesday afternoon.

Judge Loren AliKhan halted the order until at least Monday, US media reported, after several non-profit groups filed suit claiming it was illegal.

Even before the order was set to begin, online portals used to access the Medicaid health insurance program for poor families and disabled individuals became inaccessible.

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“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.

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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.

Top Trump aide Stephen Miller later told CNN that Medicaid was not targeted, as the order “does not affect any service that the government is required to provide, does not affect any entitlement, does not affect any service to citizens, does not affect any individual benefit, any public assistance program or anything of that nature.”

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.

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.

In the past week, his administration has fired independent government watchdogs and several career prosecutors who were involved in an official probe of his attempts to overthrow the 2020 election.

The order is “certainly within the confines of the law,” Leavitt said, citing the White House legal team, while claiming Trump “has the power to fire anyone” in the administration.

Gillian Metzger, a constitutional law professor at Columbia Law School, told AFP: “Traditionally, the power of the purse lies with Congress.”

Challengers to funding halts could cite the Impoundment Control Act, which regulates the president’s control on the budget.

While the act allows some authority to delay and rescind spending, Metzger believed the order did not meet such requirements.

Among other issues, congressionally authorized spending cannot be deferred because of “policy disagreement with it,” she said.

‘Sweeping halt’

Democratic Senator Patty Murray called the order “a brazen & illegal move.”

Another Democratic senator, Richard Blumenthal, said the 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 explicitly 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.