Trump freezes federal funding to conduct spending review

President Donald Trump on Tuesday announced that federal funding would be paused while his administration conducts a review as "good stewards of taxpayer dollars", and ends progressive programmes.

The order, which came through a memo issued by the Office of Management and Budget, caused confusion over whether the cuts would affect welfare, health benefits, education programmes and other initiatives.

White House press secretary Karoline Leavitt, in her first media briefing, said the move was aimed at cutting costs to US taxpayers and would not affect assistance going to individual people.

"It is the responsibility of this President and this administration to be good stewards of taxpayer dollars. That is something that President Trump campaigned on," Ms Leavitt said.

"This is not a blanket pause on federal assistance and grant programmes from the Trump administration."

She said it was a means to end diversity programmes in the federal government and funds for environmental initiatives. "It means no more funding for transgenderism and wokeness across our federal bureaucracy or agencies," Ms Leavitt said.

Several government officials said states were locked out of the Medicaid payments systems.

"Connecticut’s Medicaid payment system has been turned off," Senator Chris Murphy said in a post on X. "Doctors and hospitals cannot get paid. Discussions ongoing about whether services can continue. Medicaid covers health care for millions of seniors and covers 40 per cent of births in America."

The decision is expected to be challenged in court by attorneys general, who called the move unconstitutional.

"This administration has unleashed mayhem with its latest illegal action, affecting kids who rely on federal funds for their next meal, seniors on Medicaid, and law enforcement fighting drug and gun crime," New York Attorney General Letitia James said in a post on X. "These chaos cuts jeopardise resources that millions of Americans rely on."

White House deputy chief of staff Stephen Miller said: "It's important to understand that it's a review process, so that we have control, democratic control, over the operations of government. This doesn't affect any federal programmes that Americans rely on, full stop."

The move also comes after Mr Trump issued an executive order declaring a 90-day pause on nearly all foreign assistance. Israel and Egypt are reportedly exempt, but the freeze affects hundreds of missions and projects around the world.

Ms Leavitt said the Trump administration blocked $37 million from being dispersed to the World Health Organisation, the UN agency from which the President withdrew through an executive order on his first day in office.

She also said that the OMB and the Department of Government Efficiency, the organisation Mr Trump created that is being run by his ally Elon Musk, would also cut funding for Gaza.

"Doge and OMB also found that there was about 50 million taxpayer dollars that was going out the door to fund condoms in Gaza – that is a preposterous waste of taxpayer money,” Ms Leavitt said.

In response to a question by The National for clarification, the press office responded with an article on Fox News that quoted an unidentified White House official as saying that the decision was made at the weekend.