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REGIONAL- Minnesota officials and organizations are scrambling after a surprise move by President Donald Trump to temporarily freeze federal funding for a wide array of programs, from road …
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REGIONAL- Minnesota officials and organizations are scrambling after a surprise move by President Donald Trump to temporarily freeze federal funding for a wide array of programs, from road construction to conservation initiatives and law enforcement grants to tribal government services. While a federal judge has put a temporary hold on the order, uncertainty remains over how long the freeze could last and what it might mean for communities that depend on these funds.
Walz reacts
Gov. Tim Walz didn’t hold back when addressing Trump’s directive, which he said could create a nearly $2 billion hole in the state budget each month.
“Minnesota will do what we can to keep the lights on, but we cannot fill the nearly $2 billion hole this will put in the state’s budget each month,” Walz said. “This isn’t conservatism. This is amateur-hour cruelty.”
At a Tuesday afternoon press conference at a St. Paul YMCA, Walz made clear his disdain for the move.
“This is not bold. It’s not leadership,” Walz said. “It’s stupid, buffoonish, childish.”
Minnesota Attorney General Keith Ellison joined a coalition of 23 attorneys general suing the Trump administration over the freeze, calling it an unconstitutional power grab. It was that suit that led to the stay of Trump’s order.
“I do not sit around looking for ways to sue Donald Trump, but in the eight days he’s been in office, he’s forced me to figure out ways to sue him almost every day,” Ellison said. “We’re never going to stop. We’re always going to stand up for the people of the state.”
State budget officials are deeply concerned about the freeze’s effect on essential services.
“Our ability to fill the gap left by this freeze is very limited,” said Minnesota Management and Budget Commissioner Erin Campbell. “Medicaid takes up the largest portion of the $1.8 billion we receive monthly, but this also impacts food assistance, state highways, local airports, school meals, and more. This is not something we can easily absorb.”
The Trump administration later confirmed that Medicaid is excluded from the freeze, which significantly reduces the hit Minnesota would take.
Confusion abounds
Trump’s two-page directive was issued without any accompanying guidance, leaving it to officials and programs to try to determine what programs would be affected. Confounding the problem, federal portals for processing Medicaid reimbursement requests from states and Head Start payments to grantees went dark on Tuesday, raising fears that those programs were being impaired by the freeze. Campbell noted that Minnesota could not access the Medicaid portal in the morning but was able to successfully submit a reimbursement request later in the day.
Some news outlets circulated a spreadsheet from the federal Office of Management and Budget (OMB) that allegedly listed the programs subject to the freeze and up for review. The extensive list further fueled the chaos surrounding Trump’s order, until finally late in the day on Tuesday the White House posted a question-and-answer page to its website to try to clarify what kinds of programs are and are not impacted.
“Any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process,” the webpage says. “In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP (food assistance) will continue without pause. Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused. If agencies are concerned that these programs may implicate the President’s Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.”
The page notes that only programs related in some way to Trump’s executive orders regarding diversity, equity, and inclusion (DEI), the green new deal, and funding nongovernmental organizations that undermine the national interest are affected by the freeze, a statement that still leaves cloudy the question of what agencies are ultimately impacted.
The White House has defended the freeze, with Press Secretary Karoline Leavitt calling it a “temporary pause” to ensure federal dollars align with Trump’s policies. A memo from the Office of Management and Budget specifically said that the freeze included, but was not limited to, “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” The OMB memo further stated that, “The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
Late Tuesday, just as the freeze was set to take effect, U.S. District Judge Loren L. AliKhan temporarily blocked it, issuing a stay until at least Monday evening while lawsuits proceed.
Possible impacts
Even with the clarifications, the confusing and abrupt rollout of the freeze has left local agencies in limbo, with organizations that rely on federal funding unsure of what comes next.
The Timberjay spoke with Arrowhead Economic Opportunity Agency Executive Director Scott Zahorik on Wednesday, after he’d had barely a day to try to figure out how the freeze will impact his programs.
“Our agency budgets probably in the ballpark of $55 million a year, and one-third of that is federal funds, so this is concerning, because it could have a pretty significant impact on a lot of the programming that we do,” Zahorik said. “This is 24 hours old, so there’s still a lot of questions to be answered, and then we have the pause by that federal judge on it, too. I guess we really need to let it shake out and see exactly what they’re talking about.”
It was clear that Zahorik had heard of some clarifications, but that many questions remained.
“They talked about programs like Head Start, rental assistance, SNAP, student loans, Medicaid, Social Security, a lot of things that will be exempt from this order,” Zahorik said. “Where we sit right now is waiting to see exactly what they’re talking about, because we’ve got other things that come from the federal level. Some of our employment training programs, Youth Build, energy assistance, weatherization, things like that that are still in a very gray area at this point. And we’ll have to see about the legalities of things there, too. There’s a lot of folks out there that feel a significant pushback is a justified response here.”
Harold Langowski, Ely Clerk-Treasurer, also took a guarded approach in assessing the potential freeze impact.
“I guess we’ll wait and see,” he said. “We’ve got a congressionally directed spending request in for the Burntside water line project right now. So that’s a $4.5 million project, and U. S. Representative Pete Stauber has included our project for $2 million of congressionally directed spending. If we don’t get that for our water supply project, it will be extremely disappointing.”
The Timberjay contacted the Bois Forte band on Tuesday to find out how the freeze might affect them, but officials were still trying to understand and assess the situation and were unable to provide a comment before press time.
Another service that could be impacted is Minnesota’s county emergency management departments, which prepare for disasters like the Rapidan Dam failure and extreme flooding. They rely heavily on federal grants.
“As government funding gets less and less, you’re going to start to see programs go away,” said Kristen Tschida, president of the Association of Minnesota Emergency Managers.
Also, officials from some Minnesota cities have reported that their Department of Justice grants for hiring police officers were suddenly put on hold.
Elected reps divided
Members of Minnesota’s congressional delegation had starkly different reactions to the freeze.
Sen. Tina Smith expressed outrage, saying she had already heard from Minnesota health centers bracing for layoffs.
“I’ve heard from community health centers in Minnesota who are already looking at layoffs by the end of the day. May not be able to make payroll at the end of the week,” Smith said. “Republicans need to grow a spine here. This isn’t a game, it’s people’s lives.”
Rep. Betty McCollum echoed those concerns, saying her offices were being flooded with calls from panicked Minnesotans.
“The phones in my Capitol Hill and St. Paul offices are ringing off the hook with calls from hospital administrators, community health centers, nonprofits, and Minnesotans who are scared that they will not have the federal assistance they rely on,” McCollum said.
On the other side of the aisle, Rep. Pete Stauber defended the move, saying it was necessary to rein in government spending.
“We are $36 trillion in debt, largely because of wasteful spending in Washington on things we don’t want and can’t afford,” Stauber said. “Rest assured, this pause on federal funding will be lifted on worthy projects, many of which I fought for in the Northland. This is good governance and what the American people voted for!”
Rep. Tom Emmer also stood by the president, calling the freeze a fulfillment of Trump’s campaign promise to shake up Washington.
“You’re going to see things like this, and your first reaction is going to be, ‘Well, this isn’t the way it’s been done,’” Emmer told Politico. “You need to understand, he was elected to shake up the status quo.”
While the court’s temporary stay has bought some time, the fight over the funding freeze is far from over. Lawsuits from multiple states and affected groups are moving forward, and organizations across Minnesota remain in the dark about their financial futures.
Trump is on the record with his belief that the Impoundment Control Act that limits presidential authority to withhold funds is unconstitutional, a view shared by his nominee for director of OMB, Russell Vought, who also told senators in his confirmation hearing questionnaire that the 2020 election “was rigged.”
OMB has no set timeline for the review process, saying that funding for some programs could be turned back on in as little as a day.
MinnPost and MPR News contributed to this article.