An order from President Donald Trump’s budget office to freeze grant funding to states has already sown confusion and spurred pushback in New York.
The state’s Attorney General, Letitia James, and five other state attorneys general on Tuesday announced they will sue the Trump administration in an attempt to stop the enforcement of the directive, which came down Monday evening.
“There is no question this policy is reckless, dangerous, illegal and unconstitutional,” James said during a virtual press conference. “From the families who rely upon Head Start for childcare, to the children across the country who depend on SNAP for their next meal, to the seniors who rely on state services to get the care that they need — this policy will disrupt the lives of millions of Americans in New York and nationwide.”
The White House’s order, poised to take effect at 5 p.m. on Tuesday, pauses federally funded programs related to policies Trump is trying to advance, including “ending DEI [diversity, equity and inclusion], the green new deal, and funding nongovernmental organizations that undermine the national interest,” according to a follow-up memo the White House Office of Management and Budget sent to states.
Among programs that could be at risk: funding for hospitals, infrastructure and disaster relief from FEMA, including for the Los Angeles fires.
The memo specified that programs providing benefits to individuals are not subject to the pause, such as SNAP, Medicaid and Medicare and Social Security, as well as Pell grants and rental assistance. But so far, all states have been locked out of their Medicaid reimbursement system, James said. The Head Start reimbursement system was shut down in Connecticut and Michigan.
California Attorney General Rob Bonta — who is among those joining the suit, with Illinois, Massachusetts, New Jersey and Rhode Island — called the directive unlawful and unconstitutional.
“The president does not have the unilateral authority to indefinitely pause all federal financial assistance under any circumstance,” Bonta said. “The U.S. Constitution gives the power of the purse exclusively to Congress. OMB is jumping so far out of their swim lane that frankly they are out of the pool.”
The National Council of Nonprofits, the American Public Health Association, Main Street Alliance and SAGE filed a lawsuit in federal court challenging the order earlier Tuesday.
Billions in NYC
Both Gov. Kathy Hochul and Mayor Eric Adams expressed uncertainty around how the directive will affect New Yorkers and indicated they’re assessing which programs could be impacted.
New York State relies on about $93 billion in federal aid, with the biggest portion for Medicaid, which provides health coverage for seven million people in the state. New York City receives nearly $10 billion in federal spending, according to an analysis from the Citizens Budget Commission.
But the freeze could affect many other agencies including the MTA, other transit agencies and public universities. It could also endanger billions of dollars from the Biden infrastructure bill promised to New York for the Gateway Tunnel ($12 billion), the MTA ($4.5 billion) and city projects ($2.3 billion).
“I am concerned about a lot of our funding sources,” Hochul said Tuesday, adding that she plans to appeal to congressional Republicans representing New York. “We are into governing, not panicking. And as I said, I’m not playing whack-a-mole with every single initiative that comes out of Washington. I have to govern a state and find more ways to make New York more affordable and safer. Those are my priorities. We will deal with the issues when they become a reality.”
In a statement, Adams said New York City is in touch with its federal counterparts and “will advocate firmly on behalf of New Yorkers whose lives are impacted by affected programs.”
Both Hochul and Adams this month unveiled budget proposals that relied on a continued stream of federal funding, despite expectations that Trump and a Republican-controlled Congress would slash aid to states and cities.
Depending on how the freeze moves forward, there could be a major disruption to the state budget process, which calls for adoption of the budget for the next fiscal year by March 30. The city would have more breathing room since its budget does not have to be agreed upon until June 30, which is also the deadline for many other states to adopt their next budgets.
Additional reporting by Greg David.
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