UPDATE
Associated Press reports that President Donald Trump’s budget office on Wednesday rescinded a memo freezing spending on federal grants and loans. The move comes less than two days after the freeze caused widespread confusion and legal challenges.
The White House Office of Management and Budget pulled the memo in a two-sentence notice sent to agencies and departments but said that Trump’s underlying executive orders targeting federal spending in areas like diversity, equity and inclusion and climate change, remained in place.
ORIGINAL STORY
A federal judge on Tuesday temporarily blocked part of the Trump administration’s plans to freeze federal grants and loans – a move that caused a day of chaos and confusion across the country.
Before the freeze was blocked, Atlanta Mayor Andre Dickens said thousands of residents who rely on housing vouchers may not have money to pay next month’s rent, while city workers across various federally funded programs risk losing their pay.
The White House budget office had ordered the pause on federal aid to begin at 5 p.m. on Jan. 28. The short-term pause – in place until Feb. 3 – issued by U.S. District Judge Loren L. AliKhan prevents the administration from freezing funding for “open awards” already granted by the federal government.
The funding pause could have impacted trillions in government spending and halted public programs that affect millions of Americans, according to a report from CNN. There were concerns that crucial programs like Head Start, Meals on Wheels, and even Medicaid might be affected by the order.
“The chaos caused by the complexity and the ambiguity of OMB’s (Office of Management and Budget) supposed guidance has already caused confusion in the public,” Jessica Morton, an attorney for the non-profits that challenged the freeze, told CNN. She added that programs like Head Start and Meals on Wheels would be impacted by it.
In Atlanta, local officials said Trump’s freeze would have an immediate impact.
Courtney English, chief policy officer and senior advisor to Mayor Andre Dickens, made an impromptu appearance at the Atlanta City Council’s Community Development/Human Services Committee on Tuesday afternoon. He told council member that the freeze was “gravely distressing.” He said the pause would shut down the portal used by federally-funded organizations to access money.
“As we stand here right now, organizations that are currently funded by the federal government don’t have access to the portal that allows them to draw down disbursement funds,” English said during the meeting.
Mayor Dickens requested a full assessment of all government departments and agencies — any office that is impacted by federal funding — to be done in the next 24 to 48 hours, English said.
Organizations impacted include the Atlanta Housing Authority, Partners for HOME, and individual nonprofits, English said. He said the freeze was impacting Head Start and other early education programs.
“Organizations are facing not being able to make payroll,” he said. “Payroll is usually done on Wednesday. Folks are to get paid on Friday. And so you all need to know that and advocate as best as you can to federal and state partners, and we are doing the same.”
How the freeze impacts larger projects is uncertain, English said.
“What we do know is that … if you drew down against that budget prior to today, that’s how much money you have,” English said. “And absent additional funding or them unlocking the portal, you no longer have funds to pay.”
Mayor Dickens said in a written statement that Trump’s decision to freeze federal funds came with no advance notice. The sudden decision puts a heavy burden on the city and its partner agencies, he said.
“These actions adversely affect not only the city’s funding for affordable housing, assistance for our unsheltered residents, economic development projects, salaries and investments in our infrastructure and public safety — they also affect partner agencies like Atlanta Housing, Partners for HOME and other organizations who currently cannot access the portals they use to pay people’s rents, operational costs or fund economic programs; in turn placing an even heavier burden on the communities we collectively serve,” said Dickens.
“More than 18,000 residents who rely on housing vouchers currently do not know how their rent will be paid next month, and workers across various federally funded programs risk losing their pay,” he said. “The Dickens administration calls on all White House decision makers to immediately restore this funding for Atlanta and the entire region — and the families from all stations of life who will suffer the consequences.”
Georgia Senate Minority Leader Harold Jones, a Democrat, said Trump’s order to freeze federal spending “clearly violates federal law and will cause economic chaos.”
“Freezing federal funding means defunding the police across the country, children missing school lunches, and victims of crime losing critical assistance,” he said in a statement.
“Trump and the Republicans who continue standing behind him have made one thing clear: The chaos created for veterans, law enforcement, domestic violence shelters, and the children of working families is only minor collateral in their mission to make life harder for most Americans.”
U.S. Sen. Jon Ossof said in a statement: “The President’s suspension of Federal grants for Georgia threatens chaos. This erratic decision risks serious damage to health care, education, public safety, and local governments across our state.”
Fulton County said it was also evaluating the freeze and said the county receives more than $53 million annually in federal funding.
