A day after the federal government announced a pause on all federal grants and loans, a federal court judge issued an administrative stay ordering the government not to block funding to existing programs until a Feb. 3 hearing.

On Monday, the White House Office of Management and Budget ordered a pause on all federal grants and loans and called for federal agencies to perform a “comprehensive analysis” to ensure those programs comply with President Trump’s executive orders, including federal bans on diversity, equity and inclusion initiatives and limits on clean-energy spending. Agencies are required to submit details of suspended projects by Feb. 10. 

The OMB announcement created uncertainty about which programs would be affected as well as chaos after state Medicaid programs reported they were blocked from accessing federal payment portals.

A subsequent memo released Tuesday stated that the temporary halt “does not apply across the board,” according to a post on X by The Washington Post. The second memo stated that the pause was limited to programs, projects and activities that fall within Trump’s executive orders, including ending DEI; the green new deal; and nongovernmental organizations that “undermine the national interest.”

With the threat of legal action coming from several states and organizations, the National Council of Nonprofits filed a motion Tuesday afternoon for a temporary restraining order with public health and small business leaders through Democracy Forward in the US District Court of the District of Columbia to block the pause. 

US District Judge Loren AliKhan on Tuesday afternoon granted an administrative stay in the case applying to part of the Trump administration’s directive, according to Reuters. 

Also on Tuesday, 23 Democratic state attorneys general said they were working on a lawsuit, calling the freezes part of an intentional effort to subvert the spending powers given to Congress.

“I think that the ambiguity, the lack of precision, is by design. They could have been very precise about what was included and what was not, what programs, what services. They could have enumerated them and set them forth in specific detail, but they decided to be vague and use buzzwords like ‘wokeism’ and ‘green new deal social engineering,’” California Attorney General Bonta said on a press conference announcing his state’s participation in the lawsuit. “That confusion, that chilling effect, has swept in, potentially, nearly all of the services and programs that the federal government funds outside of what was specifically exempted.”

The federal funding pause is not supposed to affect Social Security or Medicare recipients and does not include assistance provided directly to individuals, according to the administration. But it brought a rapid halt to a variety of federal functions, including federal Medicaid payments to states, with state Medicaid programs reporting a lack of access to the federal payment portal.

Approximately 80 million people, including almost 13 million older adults and people with disabilities, rely on Medicaid for healthcare and long-term care. About 48% of assisted living communities are Medicaid-certified to be home- and community-based service providers, and almost 18% of assisted living residents depend on Medicaid to cover their daily care, according to government figures.

LeadingAge said that its members also reported that access to Department of Housing and Urban Development rental assistance and Medicaid funding was blocked on Tuesday. The association issued an action alert in the afternoon asking its members to call on Congress to immediately end the funding freeze. During Tuesday’s press conference about the injunction, it appeared that some providers had regained access to payment portals, although others said they still were encountering issues, adding to confusion about the broader pause and its effects on providers and beneficiaries.

Describing the federal funding freeze as a “significant concern,” LeadingAge said that it potentially could affect funding that many of its members rely on across care settings and community types. 

Sen. Ron Wyden (D-OR) said in a post on X that his staff confirmed reports that Medicaid portals were down in all 50 states following the funding freeze, which Wyden called a “blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.” The Hill confirmed that state Medicaid programs across the country had lost access to federal payment portals.

The Department of Health and Human Services has almost 38,000 active grants, according to Health Care Dive, and it had authorized $714.5 billion in spending for fiscal year 2025. HHS grants fund programs under the Centers for Disease Control and Prevention and the National Institutes of Health, as well as state Medicaid programs. 

A coalition of aging services and disability-related organizations recently called on Congress to remove any proposed Medicaid policy changes from the budget reconciliation or legislative processes that would cut programming or create barriers to funding or eligibility.

Argentum said that although it understands the new administration’s intent to fully evaluate all federal funding, it urged the government to be cautious with short- and long-term policies that will affect critical job training programs, including programs for both caregiving and non-caregiving roles, that are supported by federal workforce programs, such as the Workforce Innovation and Opportunity Act, the Vocational Rehabilitation program and others.

Argentum Vice President of Workforce Development Ashante Abubakar told McKnight’s Senior Living that investments in the nation’s caregiving workforce are needed to meet the needs of a rapidly aging population.

Argentum is the fiscal agent on the $6 million Healthcare Apprenticeship Expansion Program grant from the Department of Labor, funded through a four-year Labor Department Employment and Training Administration “Closing the Skills Gap” grant that began in 2020 and serves more than 7,000 apprentices in the industry. That grant, however, is unaffected by the funding freeze.

Rachel Reeves, a spokeswoman for the American Health Care Association / National Center for Assisted Living, told McKnight’s on Tuesday that it is assessing the effects of the pause on assisted living and skilled nursing providers, calling it a “rapidly changing situation.” Reeves said that AHCA/NCAL will continue to encourage policymakers to ensure that providers have resources “to maintain and strengthen the continuity of care.”

National Council of Nonprofits President and CEO Diane Yentel described the president’s order as a “potential five-alarm fire” for nonprofits and the people and communities they serve. During a Tuesday afternoon news conference about her group’s lawsuit, Yentel said much work needs to be done to ensure the federal government’s “reckless action or attempted action” cannot move forward in the long term.

“Blocking federal grants and loans would devastate the lives of older Americans — including LGBTQ+ elders who already face unique challenges,” SAGE CEO Michael Adams said in a news release about the legal action. SAGE is one of the groups involved in the restraining order suit. “These individuals are more vulnerable to health issues, disabilities and social isolation, and often struggle to access the care and services they need. This reckless decision puts entire communities at risk.”

During the press conference on the lawsuit, Adams said that more than 11 million older adults benefit annually from federally supported and funded services. During the same event, Main Street Alliance Executive Director Richard Trent said that it was no exaggeration to say that “people may die as a result of this callous decision-making.”

Skye Perryman, president and CEO of Democracy Forward, said during the press conference that the lawsuit would continue “until the courts put an end to what is an unlawful and harmful action on the part of the federal government.”  

Justice in Aging called the order “extreme” and said that it “creates significant threats to the health and safety of older adults across the country.” 

“This funding freeze is extremely broad and could have immediate and dire consequences for low-income older adults by making it much harder for older adults to get basic services they count on — including housing, healthcare, legal services and all the supportive services, nutrition programs, and elder justice programs funded through the Older Americans Act,” Justice in Aging said in a statement.

The National Low Income Housing Coalition said that the wide-ranging order could be used to deny states and communities key federal resources used to operate and maintain housing for older adults and people with disabilities and also used to investigate and enforce fair housing and civil rights laws, among other actions. It also could affect HUD programs, including the Section 202 Housing for the Elderly program, NLIHC said. 

Senate Democrats demanded that Republicans postpone a Thursday vote on Russell Vought, nominee to head the White House OMB, following the memo’s release, according to The Hill.