Acting director Matthew Vaeth characterized the order as necessary to prevent funding for diversity, equity, and inclusion (DEI) programs and woke ideals.
The following day, the OMB retracted the initial memo, but White House press secretary Karoline Leavitt stated that efforts to freeze federal funding would continue anyway.
[9][10][11] The executive orders by Trump that were highlighted are Protecting The American People Against Invasion, Reevaluating and Realigning United States Foreign Aid, Putting America First in International Environmental Agreements, Unleashing American Energy, Ending Radical and Wasteful Government DEI Programs and Preferencing, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, Enforcing the Hyde Amendment.
[19] Despite federal statements that the program would be unaffected, Senator Ron Wyden reported that a web portal used to access Medicaid funding was inaccessible for doctors in all states.
[19][20] A memo obtained by the news agency Reuters reported that the Department of Justice was preparing to freeze four billion dollars of funding following the order.
[20] Legal opponents cited the Impoundment Control Act of 1974, which bars the president from withholding funding for political purposes, subject to review by the Government Accountability Office.
Republican leaders defended the funding pause, stating that it was an appropriate use of executive power; House Speaker Mike Johnson described it as "an application of common sense".
[23][24][25] After the attorneys general of 22 states (Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, North Carolina, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin) and the District of Columbia sued, Judge John J. McConnell Jr. of the United States District Court for the District of Rhode Island ruled in their favour on January 31, 2025, by issuing a temporary restraining order to block the funding pause indefinitely in these states and D.C.[26][27] McConnell described the OMB memo as "wide-ranging, all-encompassing, and ambiguous", adding that it "cites no legal authority" and in any case, "no federal law would authorize the Executive’s unilateral action here", which contravenes "the separation of powers".
[27] Furthermore, the Trump administration had argued that the retraction of the OMB memo rendered the case moot, but McConnell rejected this, citing a tweet by Press Secretary Karoline Leavitt denying "rescission of the federal funding freeze".