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Outside the John F Kennedy Center for the Performing Arts, a giant tarpaulin remained in place to conceal Donald Trump’s humiliation.

Guests entering the national arts complex on Sunday night could not see the section of its marble facade where Trump’s name was recently erased to comply with a court order.

But once they sat down for the Mark Twain prize for American humor ceremony, there was no hiding place as performers delivered punchlines at the expense of a US president whose power appears to be waning, at least in this corner of Washington DC.

Paying tribute to this year’s recipient, the comedian Bill Maher, the actor Woody Harrelson said: “Finally, an award for my dear friend – ironically at the Trump Kennedy Center. No, all right, we fixed that.”

The audience erupted in applause. Then, apparently acknowledging the tarp-coated scaffolding, Harrelson added: “Not as though you’d be able to notice.”

Trump seized control of the Kennedy Center last year, installing himself as its chair. His handpicked board voted to rename it the Trump Kennedy Center and affix his name to the wall. But last month, a judge ruled that the addition of Trump’s name to the building was illegal and ordered that the 18 letters be removed.

On Sunday, a step-and-repeat backdrop to the red carpet featured the name “Kennedy Center” without Trump’s name, but framed photos of the president, the first lady, Melania Trump, the vice-president, JD Vance, and the second lady, Usha Vance, remained on the wall.

The legal saga surrounding the building became immediate fodder for jokes at the gala. Former late night host Jay Leno said on the red carpet: “This is funny to me. It’s not war, it’s not antisemitism, it’s not racism – it’s vanity. It’s so silly, it’s like high school with money. Covering the name now – hilarious! It’s high school. ‘I’ll show them, I’ll cover the name!’”

During the ceremony, which Trump did not attend, the comedian Whitney Cummings quipped: “I’m just glad we all celebrated Bill tonight, even though Trump is now the board chair of this venue. He actually does have a lot of power here and he has a say what productions go on here, so enjoy this fall’s three-month run of White Hamilton.”

Hamilton, a musical written and composed by Lin-Manuel Miranda, cast actors of colour as the US founding fathers. Its producers cancelled a planned run at the Kennedy Center this year in direct response to Trump’s takeover and will stage performances at the city’s National Theatre instead.

Cummings added pointedly: “The thing about comedy is that we aren’t scared. We try not to be scared of people that bully.”

Just moments after Maher began to accept the prize, Matt Friend, a leading impersonator of the president, took to the stage and, in Trump’s voice, joked that he would accept the award himself. “I had one of the greatest comedy careers of all time,” he said. “I get so many more laughs than this guy!”

Friend also made fun of Maher’s recent White House dinner with Trump, who autographed a list of insults he had thrown at Maher. The comedian later denied that he had made a “deal” or compromised his values. Maher insisted to the Trump impersonator: “That dinner was always about just having the two sides talk to each other instead of shouting at each other.”

Last month, the US district judge Christopher Cooper upended the president’s grand designs, halting his plans to close the entire centre in July for a two-year renovation costing $257m. Trump posted on social media that Cooper “should be ashamed of himself” and indicated that he was finished with the Kennedy Center, writing: “I have no interest in continuing what could only be a hopeless journey into ‘NEVER NEVER LAND.’ The board is yet to decide on its next move.”

On Sunday, Howard Lutnick, the commerce secretary, said the president was still committed to the centre. He said: “The president is not only the commander in chief, but he’s the builder in chief.

“He’s gonna try his darnedest to make this building shine and I think he’s going to be successful. These courts are always sort of fighting with him but, in the end, he wins, and we all know that. It’s just a matter of time. He will figure it out to win, and I’m here to help.”

Asked how Trump feels about his name being removed, Lutnick replied: “I don’t talk about what the president wants to do. I leave it to him. He ‘Truths’ when he wants to. I’m clever that way. I’m a clever fellow.”

Maher, 70, relishes a persona as an unmarried atheist contrarian who defies groupthink and assails Trump as well as the “woke” left. The ceremony highlighted his role as an “equal opportunity offender” on shows such as Politically Incorrect and Real Time with Bill Maher, where he grilled Vance last week.

Among those honouring Maher were the businesswoman Arianna Huffington, the TV personality Stephen A Smith and the comedian Louis CK, who in 2017 admitted to allegations of sexual misconduct by multiple women including fellow female comedians.

Taking the stage to accept his prize, Maher reflected on his 33-year career in television, expressing a profound pride in his refusal to coddle his viewers or bow to partisan demands. “People say they want honesty. They don’t. They want to live in a bubble,” Maher told the audience, praising his own loyal viewership as a unique cohort who “do not demand to be pandered to”.

He added: “I don’t ask what will please the audience. I ask what is true and they’re OK with that.”

The ceremony drew an unusual mix of Democrats and Republicans, Trump officials and members of the public in liberal Washington. The Democratic congressman Ro Khanna of California, who has appeared on Maher’s HBO show, was among those present.

Mehmet Oz, a TV personality and administrator of the Centers for Medicare and Medicaid Services, said: “It’s valuable for America to have humorists who can pick on both sides. I am concerned that a lot of late-night humour is always directed at one side and so if you know the punchline before the comedian says it, it’s not that funny. If the punchline is always Donald Trump, well please, give me a little something else.”

Anna Paulina Luna, a Republican congresswoman from Florida, lauded Maher as a “traditional blue dog Democrat” whose willingness to call out “the craziness” is vital for keeping a polarised country together.

John Fetterman, a Democratic senator for Pennsylvania, walked the red carpet to proclaim his ideological kinship with Maher. Fetterman praised Maher’s unwavering support for Israel, noting that there had been “no daylight” between his views and the comedian’s – a stance that has made them both “outliers” within the Democratic party.

Asked about the controversy surrounding the Kennedy Center’s namesake and the president’s aggressive renovations, Fetterman said: “The centre will outlive the Trump administration and I’m not worried about putting someone’s name on it.”

The Mark Twain prize was established in 1998. Maher joins a list of recipients that includes Richard Pryor, Whoopi Goldberg, Steve Martin, Eddie Murphy, Dave Chappelle, Jon Stewart and Conan O’Brien. The ceremony is scheduled to air on Netflix on 21 July.