I know in my state school, none of the labs expect to be able to take any student, period, at least for now. Some labs have even told students they might need to find a new lab to finish their degree, which I don't know how that works. Right now, the uncertainty is playing a major role. Advisors don't know if their money will evaporate/not be renewed, and are highly doubtful that new grants will roll in. The people running federal labs are saying basically that the expectation is to run a tight ship and do the research that is necessary, but not to expect being able to run wide-ranging projects as they have, that everyone needs to reduce their size and wind down what they're doing to only what is necessary.

I certainly don't think shutting down American research and having a country where there are no new graduate students is a really sane scenario. I think some research is definitely inexplicable when it comes to being taxpayer-funded, and some labs are bloated and can run a tighter ship. But everyone is basically paying the price because of a small minority of labs who are operating as though they aren't receiving taxpayer money, and are conducting research that is truly pointless. Of course those labs exist, but they are a small group of labs... Clearly no one wants to spend the time to look at all the grants and projects individually to find the bloat. The strange part is that doing this sort of mass-culling actually just invigorates many to double-down on what they are doing if it is somewhat politically unsavory right now. So it really isn't achieving much other than recruiting an opposition to republican power, which is probably worth more to prevent than the money that could be saved.

I think it's realistic to assume that the federal government is going to just wholesale cut a lot of the science funding, because compared to other nations, America actually funds a whole lot of science, and from what I can tell, that's much less true in other countries. The effects of that might be a bit abstracted from this event, these cuts might just result in less scientific innovation, which could cost billions of dollars added up over time easily. But, if this is just a sort of shock-and-awe thing, and then money starts becoming available again and the result is that "DEI" practices are expunged from criteria, then maybe the takeaway is just that labs just act with a lot more caution. From what I see, most labs already operate under large amounts of caution because the grant system is tricky enough.