The Trump administration’s directive to pause and review trillions of dollars in federal financial assistance faced immediate resistance from critics in Washington and Connecticut on Tuesday, including the threat of an imminent lawsuit from the state attorney general’s office.
"This is a war on the American people, on Connecticut families," Attorney General William Tong said.
A federal judge temporarily blocked the pause shortly before it was to go into effect on Tuesday, according to the Associated Press.
But the memo sent to federal agencies late Monday set off a scramble as state agencies in Connecticut and across the country started to assess what effects it could have on critical programs. The White House’s Office of Budget and Management directed a temporary pause by 5 p.m. Tuesday on grants and loans that are used “to advance Marxist equity, transgenderism, and green new deal social engineering policies.”
In that memo, Acting OMB Director Matthew Vaeth argued that Donald Trump’s victory gives his administration a “mandate” to review $3 trillion in federal financial assistance and ensure it complies with the dozens of executive orders signed over the past week.
“In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” the memo said.
'Connecticut will sue'
In Connecticut, Democratic lawmakers — the constitutional officers, the congressional delegation and mayors — gathered at the state Capitol shortly before the order's 5 p.m. deadline to sharply criticize the order that Attorney General William Tong described as a "radical political manifesto."
Tong indicated earlier Tuesday that his office would take legal action, arguing that the order exceeds the president's executive authority and infringes on Congress' powers to appropriate money.
"Connecticut will sue with 21 other states seeking an immediate temporary restraining order against this brazenly unconstitutional and unlawful memorandum," Tong said at the press conference from the state Capitol. "You cannot prepare for an attack as big and as awful as this one."
Calling the memo "ill-conceived" and "broadly written," Gov. Ned Lamont sought to make reassurances that the state will keep making payments, including for the estimated 3,000 state employees who are paid either fully or partially by the federal government.
"Everything that's in our state budget, we will continue to make those payments," Lamont said. "We've got a surplus. I know that makes some people nervous, but that means we have a little bit of extra, so we'll be able to take care of all those state employees who otherwise might be cut off."
"I think that gives you some confidence that we're going to try to keep going as best as we can until we can get some clarity in terms of what's going on," he continued.
CT Comptroller Sean Scanlon, Gov. Ned Lamont, members of the state's Congressional delegation and other government officials discuss the legality of President Donald Trump's memo pausing federal funding for a broad swath of programs across the country.
Disruptions
Amid the fallout from the order, some agencies were caught flat-footed with conflicting information and have already started to see some early disruptions from the uncertainty.
An aide to U.S. Sen. Chris Murphy said the office heard from the governor’s office and some providers in Connecticut that they were not able to access the Medicaid reimbursement portal. Officials in his office also said they heard from a provider that the reimbursement system is down for Head Start, a federally funded early learning and education program for low-income families with infants and kids under age 5.
A new memo issued Tuesday said Medicaid would not be subjected to the freeze, but White House Press Secretary Karoline Leavitt was unsure about what it would mean for the health care program when asked at her afternoon briefing. That same memo said Head Start was also among the programs exempt from the freeze.
Members of Congress were also disputing the legality of the order, arguing that Trump does not have the authority to stop funds from going out that have already been approved by Congress. They argue the Trump administration violated the Impoundment Control Act of 1974, which limits a president’s ability to decline to spend money already appropriated by Congress. Trump’s team has already argued that his freeze is not considered an impoundment.
CT Democrats decry order; Republican leader says 'Back off'
Democratic state legislative leaders blasted President Trump on Tuesday, predicting his executive order would quickly run into a wave of legal pushback from states.
House Speaker Matt Ritter, D-Hartford, called the president’s action “an illegal order, an end-around Congress and causing the kind of chaos that we don’t need in this country.”
Still, he predicted the order itself would be stymied quickly via injunctions.
“I actually think this will be over in 24 hours,” he said.
“We know it’s illegal,” added Senate Majority Leader Bob Duff, D-Norwalk. “We know he can’t do it. … And it may take some time for the courts to sort that stuff out.”
But Ritter added that even if Trump’s order is set aside by the courts, the fate of federal funding for states likely won’t be decided by Congress for months. The Hartford Democrat noted that some of the grant categories the president is rumored to be eyeing for cuts — and particularly Medicaid — would impact Republican-controlled states as harshly or more so than Democratic ones.
“How does it help you in Arkansas to say to providers of dental care, ‘I’ll pay you even less,’ so less children get the services they need, the preventive services they need?” Ritter said.
But Republicans bemoaned that Democrats were jumping to conclusions. House Minority Leader Vincent J. Candelora, R-North Branford, accused Democrats of overreacting to a memo rife with questions about its actual impact.
“We have a new administration at the federal level. There are going to be changes. What I don't appreciate are Democrats racing to the microphone to fear monger, and that's all we have seen over the last week. They are rooting for failure.”
“I would like to see how it plays out. I've read some of that information. There's a lot of clarity that needs to be had. And I think everybody needs to sort of take a deep breath, take their temperature and back off.”
He noted that Trump’s threat of tariffs immediately prompted the president of Colombia to accede to deportations on military aircraft. But Trump’s strategy then was clear enough.
“I don't know what the strategy is,” Candelora said about the funding freeze, “and so I take a wait-and-see approach.”
Immediate consequences of the memos remain unclear
The scope and potential consequences of the directive remained unclear Tuesday. The memo noted that it would not affect Social Security and Medicare benefits or assistance “provided directly to individuals.”
In a new memo released since the announcement, the White House sought to clarify what would qualify under the freeze, saying it “does not apply across the board” and is limited to programs and projects that fall under the recent executive orders.
They named programs that would be exempt from the freeze, such as Medicaid, food stamps through the Supplemental Nutrition Assistance Program, student loans and Pell Grants, rental assistance and Head Start.
But it remains to be seen how exactly the White House classifies some of these programs under Trump’s executive orders, especially as some reimbursement portals for some are turned off in Connecticut and in other states across the country, or what this could mean for specific state departments.
“The Lamont administration is deeply concerned about the federal government’s recent plan to freeze spending on grants and loans. We are closely monitoring this development, analyzing the impact, and remain in close contact with federal partners and our congressional delegation as we develop ways to protect these critical programs,” Office of Policy and Management spokesman Chris Collibee said in a statement. “We plan to share more details and can assure Connecticut that the Lamont administration will do everything we can to ensure residents have access to food, housing, education, and other vital supports.”
Other agencies across Connecticut were directed to provide the same statement when asked about how the freeze could specifically affect their programs.
'Chaos and confusion' in health care
The memo set off a full-court press Tuesday by Democrats in Washington about potential implications and disruptions if such funding is cut off. Lawmakers, including Murphy, ran down a list of programs that could face cuts: Title I funding for schools that help low-income families, cancer research, resources for child care and housing, disaster relief efforts and transportation projects.
“Trump’s actions would wreak havoc … in red and blue communities everywhere,” U.S. Sen. Patty Murray, D-Wash., said at a Tuesday press conference with Senate Democrats. “This is funding that communities are expecting, and this memo is creating chaos and confusion about whether these resources will be available to them.”
Organizations and agencies ranging from health care to education are still trying to decipher what this will mean for them and the people they serve, even as some say they are still able to provide services.
“It hasn’t impacted hospitals’ ability to treat patients, and while we aren’t aware of payment impacts, we are in close contact with the state. We are concerned because Medicaid is an essential source of coverage and payment for our patients and hospitals,” the Connecticut Hospital Association said in a statement.
The Office of Early Childhood administers several programs that receive federal dollars, but it was unclear on Tuesday which of these would be affected by the pause. They include funding for to support new mothers and their infants, to prevent child abuse and to develop childcare. The Trump administration has said that Head Start program, which provides early childhood education and development support to low-income children, would not be affected, though Sen. Chris Murphy tweeted that the reimbursement portal had been shut down on Tuesday.
While the Department of Children and Families, which operates Connecticut’s foster care program and oversees many programs for children’s mental health care, declined to comment specifically on the announcement, DCF gets a significant portion of its money for the foster care system and adoption programs from the federal government. About 3,000 children in Connecticut are in the system.
Student loans safe, but much unclear in education funding'
While students should still have access to student loans and Pell grants, Samantha Norton, a spokesperson for the Connecticut State College and Universities system, said CSCU is “closely monitoring” the actions by the Trump administration.
“Our immediate concerns surround not only the financial assistance provided to our students but also other federally funded programs that they rely on,” Norton said. “We remain committed to our mission of providing access and opportunity for all students.”
Officials at the University of Connecticut said they expect any funding freeze to "certainly have some impact on us," but like most agencies and departments across the country, "the extent of this is not yet fully understood," President Radenka Maric and Provost Anne D’Alleva said in a joint statement Tuesday.
"The executive order text directs an end to 'discriminatory and illegal' preferences and policies or practices and to enforce federal civil rights laws, such as Title VII, Title IX, and Title VI — all of which prohibit discrimination," the statement reads. "However, compliance with these civil rights laws is not a new obligation because the university has always been required to comply with these laws. The executive orders contain other language that require further analysis before any potential impact on UConn can be determined."
It’s unclear what the funding pause will mean for Connecticut K-12 schools, experts say.
“The impact of the freeze to Connecticut schools will depend on several factors, including, but not limited to, what the freeze specifically applies to: if the freeze applies to federal grants that school districts receive, such as Title I, Title III, etc., the impact will be far greater,” said Michael Morton, the deputy executive director for communications and operations at the School and State Finance Project, adding that if grants have already been distributed to districts, “the freeze would potentially not impact them.”
In recent years, because of one-time pandemic relief funds, federal grants paid for about eight to 10% — about $1.1 billion — of education funding costs in Connecticut.
The federal government's contribution is normally half that, around 4% of Connecticut’s K-12 education budget, which totals over $13 billion annually and is mainly funded by the state and local municipalities.
Federal funds to local districts are mainly distributed through title grants, which largely target districts that are historically under-resourced with the greatest concentrations of high-need students, including those who qualify for free and reduced lunch, which is known as Title I.
But, “if the freeze does apply to grants that school districts receive, and districts are unable to receive those funds as Congress approved them, the impact to Connecticut districts — particularly the state's highest-need districts — would be immense, as those are critical dollars districts, students, and families are relying on,” Morton said.
Josh Morgan, a spokesperson for the Connecticut Department of Transportation, said it remained "unclear" Tuesday what impact the order would have on the agency's operations, about half of which are funded through the federal government.
"We're awaiting guidance and instructions from US DOT," Morgan said in a statement. "Our programs are reimbursements, so we pay up front and the feds pay us back."
Depending on the federal funding potentially delayed, Trump might do more harm to his political base than to the rest of the country. Most of the nation’s wealth already is concentrated in blue states.
According to a September analysis from Pew Charitable Trusts, states had enough reserves to operate for a median of 48.1 days. And of the 25 states with rainy day funds below the national median, 14 of them voted for Trump last November.
Connecticut has the reserves and strong cash position that would enable it to weather a delay in federal funding transfers longer than many other states. It ranked 17th in the nation last year with enough reserves to operate 60.4 days. And while Connecticut’s budget reserve stood at $3.3 billion during the 2023-24 fiscal year, it currently stands at a record-setting $4.1 billion.
Another analysis from Pew found that just under 30% of Connecticut’s revenue came from federal funding in fiscal year 2022, which was down a bit from the previous year.
“With our full budget reserve fund and a significant budget surplus, we have the resources to protect our residents from deep cuts, and CT Voices has already developed a comprehensive blueprint for making responsible adjustments to the fiscal controls so our state can access the funds it needs to fill in additional gaps as well as make appropriate expansions to the policies and programs we know eradicate poverty and advance family economic security,” said Emily Byrne, executive director of Connecticut Voices for Children.
“At a minimum, we should begin utilizing our rainy day fund,” she said. “If this isn’t the kind of storm it was built for, then what is?”
Connecticut Mirror staff writers Keith Phaneuf, Mark Pazniokas, Jessika Harkay, Katy Golvala and John Moritz contributed to this story.
The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation.
This story was originally published by the Connecticut Mirror on Jan. 28, 2025.
