Illustration: Maura Losch/Axios
An OMB freeze on grants and other forms of federal funding that takes effect today could question Congress' ability to disburse billions of dollars in health spending.
Why it matters: The wide-reaching OMB memo that surfaced late Monday asserts the power to temporarily freeze appropriated funds and potentially squelch Congress' power of the purse, per Georgetown law professor Steve Vladeck.
What's inside: The memo specifically said that each agency must "complete a comprehensive analysis of all of their federal financial assistance programs to identify programs, projects and activities that may be implicated by any of the president's executive orders."
- Programs or activities that could be impacted include "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal," per the memo.
- The order becomes effective at 5pm ET today (Tuw, and agencies must submit program information to OMB by Feb. 10.
Between the lines: Although an OMB document says "mandatory programs like Medicaid and SNAP will continue without pause," a number of state agencies today reported difficulty accessing funding portals for Medicaid, community health centers and other sources of federal funding.
- Sen. Ron Wyden posted on X that "My staff has confirmed reports that Medicaid portals are down in all 50 states following last night's federal funding freeze."
- Illinois Gov. JB Pritzker's office reported that the state was shut out of Medicaid as of this morning, the Chicago Sun Times reports.
- CMS didn't respond to a request for comment by Axios' deadline.
What they're saying: Democrats immediately slammed the order, stating that its unprecedented scope takes away congressional authority to determine federal spending.
- "As leaders of the House and Senate Committees on Appropriations, we write with extreme alarm about the administration's efforts to undermine Congress's power of the purse," Sen. Patty Murray and Rep. Rosa DeLauro, the top Democratic appropriators, wrote to OMB last night.
- "The Trump administration's action last night to suspend all federal grants and loans will have a devastating impact on the health and well-being of millions of children.… It is a dangerous move towards authoritarianism and it is blatantly unconstitutional," Senate HELP Ranking Member Bernie Sanders said in a statement.
Minority Leader Chuck Schumer also blasted the order, telling reporters today that he has talked to New York attorney general Letitia James about suing over the OMB order "right away."
- Senate Democrats also said they are asking for a two-week delay for OMB director-designate Russ Vought's confirmation vote. Senate Budget Chair Lindsey Graham's office told reporters he would proceed with the same schedule for the vote.
- Senate Appropriations Chair Susan Collins said that although there's justification to take a hard look at some programs, "this is far too sweeping" and could disrupt a lot of programs and services.
The other side: House GOP Appropriations Chair Tom Cole told CNN today that he viewed the White House's action as a "legitimate exercise of executive oversight" and that "appropriations is not a law, it's the directive of Congress."
Threat level: The National Family Planning and Reproductive Health Association is concerned at how the order may impact Title X family planning clinics.
- "Even a temporary funding pause could cause significant disruption to clinic operations, jeopardizing patients' access to contraception, cancer screenings, STI and HIV services, and other essential reproductive health care," said the group's CEO Clare Coleman in a statement.
- Other organizations that have said they could be affected include Head Start, Meals on Wheels, medical research institutions and homeless shelters that serve veterans.
The bottom line: "We're in uncharted waters here," Erik Fatemi, a principal at Cornerstone Government Affairs and a former Senate Appropriations Democratic staffer, told Axios.
- "Everyone who follows federal appropriations expected some sort of constitutional challenge from the new administration about who holds the power of the purse, Congress or the executive branch, but no one predicted anything as sweeping as this."
- Fatemi added that this order could have implications for appropriations negotiations going forward.
- "If an executive branch can essentially ignore the spending levels that Congress agrees on, then whichever party is not in power will have to ask themselves, what's the point?"
What we're watching: Law experts are already predicting that legal challenges to the memo could quickly reach the Supreme Court, where justices could ultimately decide whether an administration can refuse to spend appropriated funds.
This story has been updated with an OMB document detailing the freeze and Wyden's X post about the Medicaid impact.
