New York Attorney General Letitia James is leading a lawsuit challenging the Trump administration’s freeze on federal funding, she announced Tuesday — as the White House order caused widespread confusion and concern about its potential scale and impact.
Dozens of states, including New York, were reporting the Medicaid reimbursement portal was not working Tuesday. A White house spokesperson said it was expected to be back online shortly without affecting payments.
“We will not stand for any illegal policy that puts essential services for millions of Americans at risk, and we worked tirelessly overnight to ensure that that does not happen,” James said at a press conference Tuesday.
The lawsuit will ask a judge to immediately prevent the pause from taking effect, James said. The Attorneys General of California, Illinois, New Jersey, Rhode Island, Massachusetts and Delaware are also plaintiffs.
Trump’s pause, announced Monday night in a broad, two-page order, directed federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance.”
Although the freeze wasn’t slated to take effect until 5 p.m. Tuesday, some organizations saw an immediate impact — at least 20 states, including New York, have already reported being frozen out of Medicaid reimbursement portals, James said.
The director of the National Head Start Association said their grant recipients also weren’t able to receive reimbursements on Tuesday — although their service was restored shortly after an afternoon guidance from the Trump administration specified that Head Start is exempted from the order.
“This disruption, at best, will slow down Head Start agencies’ ability to pay hundreds of thousands of staff, contractors, and small businesses who support Head Start operations in every corner of the country,” NHSA’s Executive Director Yasmina Vinci said. “At worst, this means that hundreds of thousands of families will not be able to depend on the critical services and likely will not be able to work.”
New York received an average of $11.8 billion in federal grants over each of the past five fiscal years, according to City Hall. Federal assistance to individuals will not be affected, according to the memo — so Social Security, Medicare, food stamps, student loans and scholarships will all be unaffected.
A city Department of Social Services official, speaking anonymously, said the agency is still reviewing whether some of its benefits initiatives could be impacted, but doesn’t believe its key programs, like SNAP, will be harmed.
At a press conference addressing the order on Tuesday, Comptroller and mayoral candidate Brad Lander said the the mayor should join James’ lawsuit.
“I’m calling right now on Mayor Adams and on the corporation counsel to join those lawsuits or to file New York City’s own,” Lander said. “This is a violation of the federal government’s promise to New York City and to New Yorkers, and we cannot stand for it when bullies come not just for our lunch money, but for our housing money, and our health care money and our school money.”
Mayor Adams, who has stepped back from the public eye this week as he is dealing with a medical problem, said Tuesday his office is assessing “full reach of the administration’s announcement.”
“We are in touch with our federal counterparts as we continue to monitor this situation closely, and we will advocate firmly on behalf of New Yorkers whose lives are impacted by affected programs,” Adams said.
Kayla Mamelak, a spokesperson for Adams, would only say the mayor’s office is “reviewing our options” when asked if the city will join the suit seeking to block Trump’s funding freeze.
The memo, written by Matthew Vaeth, the acting director of the federal Office of Management and Budget, specifically called out “DEI, woke gender ideology and the Green New Deal” as areas in which the White House has made it clear it wants to stamp out funding.
House Minority Leader Hakeem Jeffries, New York City’s top Democrat in Congress, excoriated Trump’s move in a letter to fellow Democratic lawmakers in which he urged them to attend an “emergency meeting” set for Wednesday.
“Republicans are ripping off hardworking Americans by stealing taxpayer dollars, grants and financial assistance as part of their corrupt scheme to pay off billionaire donors and wealthy corporations,” Jeffries wrote in the letter, which promised a “forceful response” to the order.
“The Republican Rip Off will raise the cost of living for the working class, while hurting children, seniors, veterans, first responders, houses of worship and everyday Americans in need.”
“We are into governing, not panicking,” Gov. Hochul said in response to the directive. “And as I said, I’m not playing whack-a-mole with every single initiative that comes out of Washington. I have to govern a state and find more ways to make New York more affordable and safer.”