Oregon leaders were scrambling Tuesday to understand what a freeze on federal grants and loans ordered by President Donald Trump — and already subject to a court fight — might mean for the state and its residents.
Gov. Tina Kotek said the move was already taking a toll as mass confusion struck over the future of several federal portals that typically allow Oregon agencies to seek reimbursement for things like health care, education and child support.
“When federal funds that are meant to serve the most vulnerable Oregonians are suspended or unavailable, that has impact on Oregonians,” Kotek told reporters during a news conference in Salem. “It’s a dereliction of federal government’s duty to protect Americans.”
By the afternoon, Attorney General Dan Rayfield said the state would join a lawsuit alongside 22 other states and the District of Columbia seeking to invalidate Trump’s order. That suit was filed in Rhode Island.
“Congress has the authority to spend, not the president,” Rayfield said, adding: “When you exceed your powers, it is part of our responsibility on behalf of all Oregonians to hold the Trump administration accountable.”
Meanwhile, one legal challenge already appeared to have made an impact. The that a federal judge in Washington, D.C., temporarily paused Trump’s directive.
Trump’s sweeping order, revealed in a memo that leaked Monday, requires federal agencies to cease all federal assistance — including payments like grant funding that is integral and common to state budgets.
The administration said the move is an attempt to ensure federal spending aligns with a raft of executive orders Trump signed during his first week back in office, including directives aimed at illegal immigration, green energy policies, policies to accommodate trans people, and more.
“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” the memo said.
The promise of legal challenges was among the only certainties available Tuesday, as agency directors, lawmakers, and the governor’s office sought to better understand what pieces of the state’s funding picture could be in jeopardy.
Federal funds of Oregon’s current two-year budget — nearly a third of spending. That includes a hefty amount of funding for the Oregon Health Plan, the state’s version of Medicaid, which was a major focus on Tuesday as officials grappled with what the order would do.
U.S. Sen. Ron Wyden said in a post on X that his office has “confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze. This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”
In a document clarifying the extent of the pause, the Trump administration said Medicaid funding was not being put on pause. The , issued by the Office of Management and Budget, has no named author. It was being circulated by federal lobbyists on Tuesday.
“In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause,” it reads. “Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.”
But Kotek told reporters that state officials were unable to seek reimbursement for both Medicaid and Head Start services as of Tuesday, alongside several other programs.
She urged Oregonians needing medical care to keep their appointments, and said the Trump administration is saying Medicaid is not affected when the reality is playing out differently. “They say one thing and then they can’t answer questions about what’s actually happening here in Oregon,” Kotek said.
The White House said Tuesday that it expected the Medicaid reimbursement portal to be brought back online.
“We have confirmed no payments have been affected — they are still being processed and sent,” White House spokeswoman Karoline Leavitt .
Kotek and Rayfield were among a chorus of Oregon Democrats blasting the move.
“The President is not a king, and the laws Congress passes are not suggestions,” U.S. Sen. Jeff Merkley said in a statement. “The Trump administration must follow the law and immediately reverse this shameful order.”
U.S. Rep. Andrea Salinas called the directive an “unprecedented steal” that could have wide-ranging impacts.
“Children and seniors will go hungry, parents will pay more for child care, small businesses won’t be able to meet payroll, veterans will lose access to housing and health care, and rural communities won’t get the relief they need to prepare for and recover from wildfires and other disaster,” Salinas said in a press release.
The state’s top Republicans were slower to offer thoughts on Trump’s order, but at least one said he was heartened by the move.
Senate Minority Leader Daniel Bonham, R-The Dalles, said the spending freeze is “all about making sure taxpayer dollars aren’t being wasted.”
“Pausing to assess how taxpayer money is being spent isn’t just smart—it’s necessary,” Bonham said, adding that Oregon’s budget has grown quickly while many state services are lacking. “Oregon should follow the Trump Administration’s lead and take a hard look at its own budget.”
Inquiries to House GOP Leader Christine Drazan and U.S. Rep. Cliff Bentz, the state’s only congressional Republican, were not immediately answered. Bentz sole public response appeared to be a repost on the social media site X that highlighted the Trump administration’s contention that Medicaid was not affected.
Among Oregon government officials on all levels, uncertainty seemed to reign.
“All public institutions – including schools – are in a state of confusion,” Salem-Keizer schools Superintendent Andrea Castañeda said.
Top legislative budget writers were conferring with staff to determine what proportion of federal funds might be impacted -- and how that might impact the state’s budgetary situation in both the near and long-term.
“We are still in the fact-finding stage to fully determine what the impact of these Trump Cuts will be,” said state Sen. Kate Lieber, D-Portland, a co-chair of the Legislature’s budget committee. “What is already clear is that if these cuts go into effect the impact to Oregonians will be devastating.”
the U.S. Governmental Accountability Office, the federal government spent around $1.2 trillion in grants to state, local and tribal governments in 2022. It wasn’t immediately clear Tuesday what proportion of Oregon’s federal funds could be impacted by the order.
OPB reporters Conrad Wilson, Amelia Templeton and Natalie Pate contributed to this story
