Update: Trump Administration Rescinds Federal Funding Freeze Following Widespread Confusion, Lawsuits

Those Using Medicaid System, Law Enforcement and Education Agencies, and Research Institutions All Reportedly Effected by Freeze

By Christina McDermott & Callie Fausey Tue Jan 28, 2025 | 08:07pm

This article was underwritten in part by the Mickey Flacks Journalism Fund for Social Justice, a proud, innovative supporter of local news. To make a contribution go to sbcan.org/journalism_fund.

[Update: Wed., Jan. 29, 11:11am] On January 29, the Trump administration rescinded the federal funding freeze amid reported widespread confusion in Washington, multiple lawsuits, and reports of people and organizations unable to gain access to aid. Those using the Medicaid system, law enforcement and education agencies, and research institutions were all reportedly affected.

Amid the federal freeze frenzy, the White House Office of Personal Management sent an email to federal employees yesterday offering them pay through September 30 if they resigned by next week.

[Original Story] A federal judge has temporarily blocked the Trump administration’s plan to halt the flow of $3 trillion of allocated federal funding for any program that does not align with the administration’s policies. That includes policies on the environment; diversity, equity, and inclusion (DEI); and immigration.

The plan, leaked in a White House memo on Monday night, would not affect programs that provide funds to individuals, like Social Security, SNAP, Medicare, or Medicaid (i.e., Medi-Cal). Small business funding, Pell Grants, and Head Start funding would also continue.

The freeze could impact other funding for education programs, medical programs, infrastructure projects, and law enforcement programs. Here’s a review on the memo, and what this means for Santa Barbara County.

What’s Happened

A White House Executive Office memorandum, dated January 27, states that it requires federal agencies “to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.” These requirements include aligning their grants and projects with Trump’s executive orders.

Until each agency aligns with the President’s priorities, they must temporarily stop all financial assistance — that means funding — that may be in conflict with the executive orders. That includes foreign aid, DEI measures, nongovernmental organizations, “woke gender ideology,” and the Green New Deal.

“The use of Federal resources to advance Marxist equity, transgenderism, and Green New Deal social engineering policies is a waste of taxpayer dollars,” the memo states.

Minutes before the memo was set to go into effect on Tuesday, January 28, Judge Loren L. AliKhan, a U.S. District Court Judge in D.C., put a temporary stay on the action.

What Could Be Impacted in Santa Barbara

Any federal program that is considered inconsistent with Trump’s policies or requirements could be canceled, according to the memo. The memo references executive orders on immigration policy, environmental policy, DEI initiatives, policy surrounding transgender recognition, and policy surrounding abortion.

Santa Barbara County agencies, such as the County Education Office, are still evaluating the full scope of the order.

“We want to assure our community that the Santa Barbara County Education Office is actively monitoring the situation to understand the implications for our schools,” said Superintendent of Schools Susan Salcido. Federal grants support a wide range of public school programs, she said, including special education, school meals, teaching training, and many other areas.

Schools operate on carefully planned, multiyear budgets that rely on “stable funding sources,” including federal, state, and local funds. Budgets are finalized at the start of the fiscal year in July, “and any mid-year changes or stoppages in funding can significantly disrupt the ability to serve students and maintain essential programs,” Salcido explained. “We are committed to keeping our community informed as we learn more.”

Goleta City Councilmember Stuart Kasdin, a former employee of the U.S. Office of Management and Budget (the government body that issued the memo calling for the freeze), mentioned his concern for Community Development Block Grant funds, which are federal grants that support homeless and housing assistance. He called the potential impacts “immediate” and “drastic.”

Response at the Federal Level

A statement from Congressmember Salud Carbajal’s office calls the move theft from the Central Coast’s taxpayers, and says the Central Coast received $1.4 billion in federal aid and grants last year alone.

“This action is not only cruel, it is also illegal. Congress, on a bipartisan basis, approves these funds to help raise the quality of life and keep our communities safe,” Carbajal said in the press release. “The president does not have the authority in law or the Constitution to unilaterally halt these federal assistance programs. I will fight with everything I have to ensure this illegal theft of taxpayer dollars is overturned.”

The press release said that concerned Central Coast residents should contact his office directly.

Senator Adam Schiff said that the pause would have immediate and “deeply destructive” consequences.

“The withholding of vital funds will hurt every community across the country — red, blue, rural, urban, and everything in between — and throw them into chaos,” Schiff said in a press release.

“Law enforcement relying on federal dollars to support their equipment and critical training don’t know if those dollars will continue to flow. Seniors counting on federal assistance to help pay their rent and fill their medications are left without an answer,” he added. “Families who lost their homes in the recent Los Angeles fires wondering if FEMA and other disaster assistance will abruptly stop, parents expecting to be at work tomorrow wondering if their child care provider’s doors will still be open and for how long.”

“Senate Republicans must join in condemning this reckless move by the president, or risk losing Congress’ most effective check on a run-away executive — the power of the purse — for good.”

Response at the State Level

California’s Attorney General Rob Bonta, along with New York Attorney General Letitia James, led a coalition of 23 attorneys general in filing a lawsuit seeking an immediate court order to block the pause. According to Bonta’s office, programs impacted by this freeze include disaster-relief funding for Los Angeles, as well as public health and safety funding and education funding.

“Many states could face immediate cash shortfalls, making it difficult to administer basic programs like funding for healthcare and food for children and to address their most pressing emergency needs,” wrote the Attorney General’s Office in a press release.

Extension of Executive Power

The memo further states that all agencies must assign a political appointee to oversee each of their federal assistance programs. This move would add partisan oversight to government agencies.

In his press release, Schiff states that this pause is part of a broader effort to broaden presidential controls.

“Trump’s impoundment of these funds is part of a broader effort to seize control of every aspect of government and remake it in his flawed image. Along with the unlawful firing of government watchdogs, his firing of career prosecutors, and his pardoning of violent felons, he seeks to transform America into a one-party, one-man state,” he said.

What’s Next

Judge AliKhan’s current temporary block on the funding freeze will last until at least Monday afternoon, February 3.

Capitol Advisors, a California group of policy consultants, stated that the reaction and clarifications released after the memo leaked show a lack of coordination.

“While the Administration will likely push back on AliKahn’s ruling and point to her appointment by President Joe Biden as a way to discredit her, it seems clear that President Trump’s Administration issued this directive without much coordination among federal agencies and departments.”

Goleta Councilmember Kasdin, drawing on his experience working for the OMB (Office of Management and Budget), compared the situation to Trump’s previous administration, during which he initially tried to ban all Muslim people from entering the United States. Various courts blocked the order multiple times, until the Supreme Court overturned the block on his subsequent, revised order, lowering the number of refugees accepted into the country and particularly targeting Muslim-majority countries.

Kasdin expects to see the same kind of back-and-forth situation with this funding freeze, causing “a ton of uncertainty all around.”

Elijah Valerjev contributed reporting to this story.