ASHEVILLE, N.C. (828newsNOW) — A White House directive to pause federal grants and loans sparked fear, uncertainty and a flurry of lawsuits before a judge intervened Tuesday, temporarily blocking the order.
President Donald Trump’s administration said the freeze would not affect federal assistance to individuals, such as Social Security, Medicare, food stamps, student loans and scholarships. But administration officials said the pause was necessary to ensure funding for other programs complies with Trump’s executive orders, which aim to reverse progressive policies on transgender rights, environmental justice and diversity, equity and inclusion.
A federal judge blocked the directive minutes before it kicked in Tuesday. The order was placed on hold until Monday while legal wrangling continues.
Gov. Josh Stein said on X he was “concerned that freezing federal funding will hurt North Carolinians, especially those recovering” from Tropical Storm Helene in Western North Carolina. Stein said he was seeking clarity from federal officials and working to ensure people in the storm-affected areas get the support they need.
Attorney General Jeff Jackson joined attorneys general from 22 other states in asking the federal court for an immediate temporary restraining order to prevent the freeze from going into effect.
“This sudden freeze in federal funding is so sweeping that it could cause widespread and immediate harm across our state — delaying disaster recovery in our western counties, undercutting law enforcement, and affecting children and veterans. It violates constitutional power over federal spending, and I’m taking legal action to stop it,” Jackson said in a news release.
The freeze was announced late Tuesday without advance notice and without any expiration date, Jackson’s news release said. Although it’s not clear which programs and funds would be suspended, the announcement left government agencies and other organizations across North Carolina uncertain about the services they can provide in upcoming weeks.
Tropical Storm Helene devasted North Carolina, causing about $60 billion in damage when it hit the state in September. Late last year, Congress approved spending $29 billion in federal funds for disaster recovery, small business aid and road and bridge repairs in storm-ravaged states. The federal government’s freeze could delay receipt of these funds, disrupting recovery efforts and delaying North Carolinians’ ability to repair their homes, businesses, roads, and bridges, and revitalize Western North Carolina, the news release from Jackson’s office said.
The freeze could also devastate state and local law enforcement’s ability to protect people from violent crime. It could cut off federal funding for state and local law enforcement agencies and could limit the State Crime Lab’s ability to test evidence related to law enforcement investigations, according to the news release. The freeze could also pause victim assistance programs, including grants funded through the Violence Against Women Act and grants to prevent child abuse.
In North Carolina, the freeze could also cause major uncertainty around funding for tens of thousands of jobs, health care, veterans’ programs, food assistance including school breakfast and lunch, tribal assistance, support for military servicemembers, and defense and military research, the news release said.
The attorneys general argued the law violates the Constitution and the Administrative Procedure Act by halting federal spending without any regard for the laws and regulations that govern each source of funds or the harmful effects of such a freeze.
The proposed funding freeze also has universities nationwide scrambling to determine how it could affect research programs, students and faculty.
“We are closely monitoring the proposed changes in federal policy and won’t be able to comment further until we have a full understanding of any potential impacts,” a spokesperson for Western Carolina University said.
Mars Hill University officials are also waiting to see how the freeze plays out.
“We have students that have federal funding in the form of Pell grants and other federal aid. We also have several programs that are federal grant funded, mainly in the area of student support. We are watching the updates and working to interpret the range of executive orders and related memos and the implications they may have now and in the future,” A Mars Hill university spokesperson said.
University of North Carolina administrators sent a campus email urging patience until decisions can be confirmed directly from federal agencies.
“The messaging is, ‘Try not to panic, and sit tight,’” psychology professor Keely Muscatell said. “But I also think it’s a lot easier said than done.”
The Associated Press contributed to this story.