CHARLESTON — State and congressional leaders in West Virginia are monitoring a now-paused temporary federal freeze in grants and aid that could have short-term and lasting effects on the state budget.

The freeze was supposed to go into effect Tuesday at 5 p.m. but the Associated Press reported that U.S. District Judge Loren L. AliKhan issued an administrative stay, pausing the federal freeze until Monday.

According to the memo, the freeze excludes Social Security, Medicare, or other direct assistance to individuals.

However, the Washington Post reported Tuesday that Medicaid, certain school funding, and housing funds all faced interruptions. White House officials denied that these issues were connected to the freeze.

Federal agencies are to review all financial assistance to ensure those programs are not funding diversity, equity and inclusion (DEI) initiatives, former President Joe Biden’s environmental programs, transgenderism, or other “social engineering” policies.

“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, and Making America Healthy Again,” Vaeth wrote.

According to the OMB, out of the more than $10 trillion spent by the federal government in fiscal year 2024, $3 trillion of that was in federal assistance alone, such as grants and loans. The OMB set a deadline of Monday, Feb. 10, for federal agencies to report to the OMB regarding paused programs. The OMB could grant exceptions to the pause depending on the program.

It was unclear Tuesday how this temporary freeze would affect West Virginia. When asked about the issue, Morrisey said his administration was still reviewing the order.

West Virginia’s general revenue budget is already running close to estimates, with a modest $80 million surplus project by the time fiscal year 2025 ends on June 30. But Morrisey announced nearly two weeks ago that his budget people are projecting a $400 million hole in the general revenue budget for fiscal year 2026 beginning on July 1 as of his first day in office on Jan. 13. Morrisey attributed the $400 million budget hole to the state’s reliance on one-time federal monies, such as COVID-era spending.

“Let’s be clear, the last number of years, a lot of the one-shot revenue came from the federal government,” Morrisey said. “The federal government effectively transferred a massive amount of money. You get used to that money. Well, those days are coming to an end as we know.”

According to a Fall 2024 report by the Pew Charitable Trusts, the percentage of West Virginia revenue from federal funds in fiscal year 2022 was 45.1%, up from 41.9% in fiscal year 2021 and below the 50-state average in 2022 of 36.4%. West Virginia ranked eighth in the nation for percentage of state revenue from federal funds only behind neighboring Kentucky.

According to Federal Funds Information for States, supported by the National Governors Association and the National Conference of State Legislatures, West Virginia received a total of $7.2 billion in federal grants in fiscal year 2023. Of that, 40% was for non-Medicaid programs, or $1,616 total grants per capita.

For non-Medicaid federal grants, West Virginia receives most of its grant dollars for the highway performance program, followed by surface transportation funding, abandoned mines, and Temporary Assistance for Needy Families.

U.S. Sen. Shelley Moore Capito, R-W.Va., is the fourth ranked member of Senate Republican leadership, chairwoman of the Senate Environment and Public Works Committee, and a member of the Senate Appropriations Committee. Her office is monitoring the federal assistance freeze.

“At this point, Senator Capito and her staff are trying to fully understand the scope and process regarding the memo put out by OMB regarding freezing of federal funds,” a spokesperson for Capito said Tuesday afternoon. “We have heard from West Virginians who are concerned about this, and Senator Capito shares that concern, given she has advocated and been responsible for securing many of these funds.”

Speaking Tuesday afternoon on NBC’s Meet The Press Now, U.S. Sen. Jim Justice, R-W.Va., urged the public to be patient with the Trump administration as it reviewed federal spending.

“At the end of the day though, he’s got to freeze everything in order to get his arms around it,” Justice said. “Just give him a little time. It’s a good man, a really good man. And we’re going to have to reset America. If we don’t reset America, look where we’re going.”

U.S. Rep. Riley Moore, R-W.Va, is a freshman member of the House Appropriations Committee. In a statement Tuesday evening, Moore said the temporary freeze was necessary to ensure federal spending aligned with Trump administration goals.

“The President’s temporary pause on certain grant funding is a necessary and wise action, one that will allow his Administration to confirm these tax dollars are being spent appropriately and align with his agenda,” Moore said. “I’m supportive of this temporary pause, which ensures direct assistance to Americans continues without delay, all while re-aligning spending with President Trump’s priorities.”