By Jeremy Herb, Ella Nilsen, Rene Marsh and Priscilla Alvarez

(CNN) — Federal agencies across Washington are finding ways to keep funding frozen even after judges last month temporarily blocked the White House’s effort to pause trillions of dollars in federal assistance.

FEMA has clawed back $80 million intended to help New York City house migrants. The EPA has paused more than 30 grant programs, including some providing money for schools to buy electric buses. And USAID contractors say hundreds of millions of dollars of contracts have not been paid.

Trump officials say the suspensions are lawful and comply with President Donald Trump’s executive orders, arguing he has broad powers over federal spending as president. But multiple lawsuits now accuse the administration of violating Congress’ powers over government spending, as well as a federal judge’s orders to turn funding back on after the White House freeze late last month.

Interviews with more than two dozen administration officials, government contractors and activists – as well as court filings in lawsuits alleging the government is failing to fulfill funding lawfully appropriated by Congress – reveal the degree to which federal spending remains in a state of chaos as Trump and Elon Musk’s Department of Government Efficiency move rapidly to axe spending, even as judges tell the government to continue letting money out the door.

That’s left US contractors in a state of upheaval, and in many cases led to furloughs and layoffs of workers at organizations that rely on government funding.

“People are just flipping out, and most of them are being careful about what they say,” said Jason Walsh, executive director of climate and labor group the BlueGreen Alliance.

Walsh told CNN that reaction from EPA grantees – whose funding was paused, restarted and then paused again last Friday – has been a mix of “panic, confusion and anger.”

“Contracts are going to get broken if this doesn’t stop, and workers are going to get laid off,” Walsh said. “I didn’t anticipate how fully brazen they’d be in ignoring the courts.”

The White House argues that it’s rooting out illegal spending inside the federal bureaucracy, saying that the DOGE-directed cuts being made are targeting waste, fraud and abuse.

“Any court that would say that the president or his representatives – like secretary of the treasury, secretary of state, whatever – doesn’t have the right to go over their books and make sure everything’s honest … I mean, how can you have a country? You can’t have anything that way. You can’t have a business that way. You can’t have a country that way,” Trump said in the Oval Office alongside Musk on Tuesday.

‘We’re all just kind of frozen’

Late last month, the White House budget office released a memo implementing a sweeping freeze of all federal assistance beyond several exemptions. After an outcry, chaos and multiple lawsuits, the White House rescinded the memo – but kept in place the funding freezes covered by Trump’s executive orders to suspend funding for most foreign aid; diversity, equity and inclusion programs; and for President Joe Biden’s Inflation Reduction Act, which contains billions of dollars in clean energy funding.

Two federal judges have imposed temporary injunctions blocking the Trump administration’s attempts to freeze funding through the budget office, and other judges have sought to keep money flowing so too much harm isn’t done. But the courts’ restraining orders haven’t completely tied the hands of the Trump administration to halt funding while the lawsuits play out in court.

On Monday, FEMA announced it was suspending $59 million in payments to New York City, which has received federal funds to in part house migrants after grappling with a surge in recent years. In all, the Trump administration revoked more than $80 million in funds from the city’s bank accounts Tuesday evening, a move Comptroller Brad Lander described as a “highway robbery” of money allocated by Congress more than two years ago, arguing the administration was violating the court’s injunction.

Inside FEMA, four officials were fired over the payments, which FEMA employees say has wrecked morale and sparked fears that more firings will follow for those just doing their jobs.

“It doesn’t take a genius to figure out that [Trump] wants us to not process grant payments, and the way to do it is to terrify us all into thinking that we will get fired if we do our basic job functions,” said one FEMA employee. “We’re all just kind of frozen.”

In court on Monday, the Justice Department sought clarification from one of the judges who imposed an injunction to confirm whether suspending the $59 million was allowable, arguing the funds were “going to entities violating applicable federal laws.” The judge wrote that the temporary restraining order did not prevent the government from terminating funding based on authority in existing law.

Lawsuits show how funding is being frozen

USAID was among the first targets of DOGE. Musk cheered the demise of the agency, which was folded into the State Department and saw most of its more than 10,000 staffers placed on leave. At the same time, Musk’s team also sought to set up a direct method to stop USAID payments by gaining access to a sensitive payment system at the Treasury Department.

A young software engineer from DOGE who is no longer working with the federal government was given access to look at the source code and data of the Treasury Department’s accounting systems, which distribute trillions of dollars each year in payments for the federal government.

And at one point earlier this week, Treasury held an international payment request from the Millennium Challenge Corporation, a foreign aid federal agency, and sent a copy of the file to the State Department for review, according to a sworn statement from a Treasury official.

State Department officials never officially responded. But shortly after, the official at the agency who ran point on the payment process requested the Fiscal Service rescind the payment request.

The federal aid cuts have also resulted in funds to support USAID workers abroad becoming tied up, or nonexistent. Contractors and foreign aid workers – including those who had to flee from rebel unrest in Congo at the end of January – have reported this week that reimbursement for their expenses for work on behalf of the government hasn’t come through.

In a lawsuit filed this week, aid groups said millions of dollars of payments have not been received for work completed, including more than $103 million in outstanding invoices to Chemonics for work in 2024 and $120 million in invoices from DAI, two aid groups that receive substantial funding from USAID.

Without government funding, the organizations have furloughed large portions of their staff, the lawsuit states. Democracy International has furloughed its entire US staff, while Chemonics has furloughed 750 people, which is nearly two-thirds of its US-based workforce.

During hearings in two additional lawsuits seeking to block the freeze on federal aid Wednesday, lawyers for aid organizations said that the payment portal for USAID was completely frozen and that the waivers issued for specific types of foreign aid to continue were not actually resulting in aid being distributed.

The federal judge in that case is set to rule on whether to put in place an injunction to stop the foreign aid freeze.

Environmental grants turned on and off

The situation has been particularly chaotic at the EPA, where funding for more than 30 grant programs has been turned on and off multiple times over the past two weeks.

An EPA spokesperson told CNN in a statement that it followed last week’s court order, enabling grantees access to funding last Tuesday morning from the Bipartisan Infrastructure Law and the Inflation Reduction Act, two laws passed under Biden.

The programs were frozen again last Friday.

The spokesperson added that the Trump EPA identified certain grant programs as “having potential inconsistencies with necessary financial and oversight procedural requirements” or grant conditions. The EPA spokesperson didn’t clarify if those “inconsistencies” were the basis for pausing the grant programs again on Friday.

Some of the grant money that has been paused was intended to pay for air-quality sensors for low-income communities around the country. These sensors are considered critical for some communities like “Cancer Alley,”?the 85-mile stretch between New Orleans and Baton Rouge with the highest risk of cancer in the nation, home to more than 150 chemical plants and oil refineries.

An EPA memo obtained by CNN argued that a pause was necessary to review programs from the prior administration, citing a hidden-camera video captured by a conservative activist of a Biden EPA official describing the agency’s funding push at the end of the last administration as “throwing gold bars off the Titanic.”

“This memo is clearly an attempt to find reasoning to continue to freeze grants for things they don’t like despite the court’s order. It’s their workaround,” an EPA employee familiar with the memo told CNN.

At the Department of Energy, two sources told CNN that grants related to the Biden-era Inflation Reduction act and Bipartisan Infrastructure Law remain frozen. An internal agency memo sent last week and obtained by CNN stated that any financial transactions related to laws had to be reviewed and approved by a political appointee.

Jeremiah Baumann, former Biden administration deputy chief of staff to the Energy secretary, said the directive in the Energy Department’s memo has the effect of grinding grant disbursements to a halt by making the process extremely onerous.

“There are easily thousands of transactions a week that a political appointee would suddenly now have to approve. There are hundreds of grants, and each has multiple payments per year,” Baumann said. “It’s unrealistic to think an appointee would have the time or that the agency would have the manpower to do this, so payments just won’t get made or may be made late.”

Inflation Reduction Act funding beyond clean energy and climate has also gotten caught up in the freeze. For instance, the law contained $4 billion intended to reduce Western states’ reliance on the Colorado River and compensating them for voluntary water cuts.

In 2023 and 2024, the Biden administration entered into several contracts to pay western water users to conserve water and to fund water-saving projects like installing drip irrigation, canal lining and turf-removal in water-stressed cities. But that funding spigot has been abruptly pulled, two sources familiar with the situation told CNN.

A Native American tribe that has binding contractual agreements with the federal government for multiple water savings projects recently tried to access $8 million of obligated federal grant money and was told the funding was paused, a representative of the tribe told CNN. The representative described the situation as “extraordinarily serious.”

Electric vehicle funding on pause

Billions of dollars in funding for federal transportation projects is also currently frozen, according to a source familiar with the matter.? That’s led to confusion at the state and local level, where officials are scrambling to figure out how to proceed with projects that are already in the works.

For instance, Trump’s Department of Transportation also abruptly froze?a $5 billion bipartisan grant program to helps states build EV chargers along highways and roadways, according to a DOT memo released last week.

In addition to freezing funding, the memo suspended state plans that were approved by the Biden administration to build out charging networks, until the new administration can change its guidance for it – due out sometime in the spring. The memo added no federal grant money will flow to states that were building charging stations.

One source said that federal officials are receiving letters daily from states and localities worried about costs – suggesting they may send workers home from jobs if that will help start or pay for the projects.

A Brooklyn-based climate tech company called it’s electric – which focuses on building EV charging stations for street parking in major cities – was notified that a?$1.5 million federal grant they were going to be awarded in stages would not be paid out. The money they’ve received so far is $28,000, according to company co-founder and chief operating officer Tiya Gordon.

“It’s creating a lot of confusion and it’s slowing progress,” Gordon said of the changes. Lucky for Gordon, her company’s funding structure isn’t reliant on federal grants – so they won’t have to lay off workers. “It really is unfortunate, and while we don’t rely on federal subsidies, it’s a headwind that’s going to slow progress for the industry.”

Funding for migrants in turmoil

Since Trump’s inauguration, organizations assisting immigrants and refugees have been trying to navigate an onslaught of executive orders that have dramatically disrupted their operations.

In one instance, the Trump administration abruptly halted services for refugees in the US, including Afghans, stunning agencies that provide critical support to recent arrivals.

Resettlement agencies receive federal funding from the State Department. Those funds are authorized and appropriated by Congress for the purpose of aiding refugee arrivals. The State Department notified partners in late January that all work under those awards must end, leaving agencies scrambling to figure out next steps.

“In Trump’s first term he suspended refugee resettlement, which damaged the United States capacity to welcome legally resettled refugees. This time, however, he combined the suspension with a complete and immediate cutoff of all funding to us and to other agencies, breaking funding agreements that we’ve had with the U.S. government for over 40 years,”?said?Mark Hetfield, president of HIAS, a refugee resettlement organization.

HIAS, along with other refugee-serving groups, filed a lawsuit against Trump’s decision to indefinitely suspend refugee admissions and halt funding.

Similarly, the Justice Department told legal service providers only days after the inauguration to stop work intended to help support immigrants, stripping away critical access for people in detention trying to navigate the tangled US immigration system.

The move had immediate repercussions.

Staff manning help desks at certain immigration courts had to be pulled off to avoid falling out of compliance. And lawyers who had scheduled to participate in legal orientation programs for immigrants were told those couldn’t proceed.

It was suddenly turned back on in early February without explanation. But the back and forth had already caused major disruptions.

“We will continue working?alongside?the Department of Justice to ensure that these?critical?services and bastions of due process are?fully restored?and?our partners in the legal field can resume their work?without future disruption or delay,”?Shaina Aber, executive director of the?Acacia Center for Justice, said in a statement.

CNN’s Zachary Cohen, Katelyn Polantz, Gabe Cohen and Tierney Sneed contributed to this report.

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