A federal judge on Tuesday paused until next week the implementation of a Trump administration order that would have frozen the issuance of federal grants and loans.

Judge Loren AliKhan’s ruling during a hearing conducted on Zoom came just minutes before the freezing order was set to take effect at 5 p.m. ET.

AliKhan said her administrative stay of the order would expire at 5 p.m. on Monday unless she decides to grant a temporary restraining order as requested by plaintiffs who filed a lawsuit Tuesday challenging the Trump administration’s action.

Earlier, the healthcare system for millions of low-income Americans and rafts of other programs were thrown into disarray on Tuesday after President Donald Trump ordered a freeze on federal funding, a move opponents blasted as unconstitutional.

It was Trump's latest step since he took office a week ago, vowing to force the US government and its employees to back his political goals or face retribution.

Online portals used to access the Medicaid health insurance program for poor families and disabled individuals were quickly inaccessible.

"This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed," Oregon Senator Ron Wyden posted on X.

White House Press Secretary Karoline Leavitt said the website would be fixed soon and that "no payments have been affected."

She defended the drastic move as part of Trump's bid to make the government "good stewards of taxpayer dollars."

The freeze is not a "blanket" stop on spending, but a tool to check that "every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken," Leavitt said.

She said the temporary pause would not impact individual Americans but would instead target programs to weed out anything "illegal."

She listed as examples racial equality and climate change programs that Trump has vowed to eradicate, and did not answer a question about whether Medicaid recipients would be cut off.

The extraordinary measure follows a similar freeze on most US foreign aid.

The order, signed by acting director of the Office of Management and Budget (OMB) Matthew Vaeth, did not make clear how such a pause on disbursements of funding will work or for how long.

Several non-profit groups have filed suit in federal court seeking a temporary halt to the order until its legality is assessed.

Federal spending included more than US$3 trillion in financial assistance like grants and loans in fiscal year 2024, all of which was approved by Congress.

Democrats accused Trump of usurping Congress' constitutionally mandated control over budget spending as part of a broader attempt to force the government to bend to his personal will. (AFP)