Federal Judge Halts Trump’s Funding Freeze: Oregon Faces Chaos Over Billions in Federal Aid

A federal judge yesterday (Tuesday) called a halt to President Donald Trump’s federal funding freeze that created chaos and uncertainty throughout the country.

Nonprofits and State Agencies Thrown into Confusion and Panic

Nonprofits and state agencies were thrown into confusion and panic after the Washington announcement that trillions of federal dollars would be frozen to organizations that rely on funding.

U.S. District Judge Loren L. AliKhan called a halt to the funding freeze minutes before it was to go into effect. The judicial decision followed a lawsuit by federally funded nonprofit groups and will remain in force until next Monday afternoon.

Oregon was again in the forefront as 21 states joined forces in another lawsuit against the president’s move that will strip the state of billions of dollars.

Oregonians Stand to Lose Access to Healthcare, Food Benefits, and Housing

If the lawsuit fails, Oregonians could lose access to many federal-funded services such as healthcare, food benefits, housing, public safety, and more.

Leading the Oregon lawsuit is Attorney General Dan Rayfield. He says the lawsuit seeks to permanently stop the presidential order to protect citizens from the chaos caused by the funding freeze.

After Trump ordered the freeze, several Oregon agencies were unable to access reimbursements for Medicaid and childcare programs, creating a chain action of chaos as state officials tried to assess the total impact of the fund freeze.

Announcing the lawsuit at a press briefing yesterday (Tuesday), Governor Tina Kotek described Trump’s action as ‘a dereliction of the federal government’s duty to protect Americans.’

Oregon Relies on $40 Billion in Federal Funding

Oregon, not unlike all the other states, relies on federal funding that comprises 30% of its two-year budget of nearly $40 billion.

Medicaid is the biggest beneficiary of federal funding, serving 1.3 million low-income Oregon families. Two-thirds of the budget pays for treatments for cancer, surgeries, chronic health problems, addiction, and mental health services.

Rayfield expressed concern about the impacts of the funding freeze, including health centers that provide care for low-income earners, regardless of their financial status.

Kotek said state agencies and nonprofit organizations were immediately affected by the presidential announcement.

The Oregon Health Authority could not access a Medicaid portal where states enter costs for reimbursements. Neither could preschool providers funded via Head Start for low-income children nor the state Department of Early Learning and Care.

The Department of Justice was also unable to access a federal portal to request reimbursements for child support. The federal government reimburses states two-thirds of those costs.

The Funding Freeze Will Impact Wildfire Prevention

The funding freeze affects wildfire prevention, a program of extreme importance to Oregon with its millions of acres of forestlands. The order will also impact community wildlife resilience like home hardening.

Another area of concern is education. About 14% of the state’s annual budget of $1 billion is from federal funding. The funds also support programs and staff for 80,000 students with special needs in Oregon’s 197 school districts.

The order will also cut into Oregon’s employment landscape as it includes development, incentives, and research grants under the CHIPS Act, launched by the Biden administration to strengthen the semiconductor industry.

By yesterday, there was still no clarity on how funding and the hundreds of millions of dollars in CHIPS awards to Oregon companies will be affected.