Top Maryland officials Tuesday grappled to comprehend the effects of pausing federal grants and loans after President Donald Trump ordered a temporary spending hiatus, eyeing any program that clashes with the new priorities of his administration.
The memo sent late Monday by Trump’s acting director of the federal Office of Management and Budget said targeted programs include, but are not limited to, foreign aid assistance, nongovernmental organizations, racial and gender diversity programs and the Green New Deal. The pause was intended to allow agencies to assess over the next few weeks whether spending conflicts with a series of new executive orders covering racial and gender diversity programs, immigration and more.
Programs delivering funding directly to individuals will not be affected, and Medicare and Social Security funds should continue to flow, the memo noted. But state officials and nonprofit leaders reported they were locked out of federal systems used to draw down federal funds for Medicaid reimbursements, food and cash assistance programs and to finance basic needs for low-earning Marylanders.
Trump’s directive caused anger and confusion among lawmakers, local governments and nonprofits wrestling with little clear communication and struggling to assess just how temporary a drop in cash flow to expect.
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A federal judge temporarily blocked the funding freeze on Tuesday as legal challenges mounted, including one from Maryland Attorney General Anthony Brown and 21 other state attorneys general.
Gov. Wes Moore answered reporters’ questions after a Tuesday evening Annapolis event one day after the Trump administration’s order came out.
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Moore said his administration responded “quickly” and when it did “to show the people of the state that we were coordinated.”
“We were literally talking about an order that called for trillions of dollars of funding cuts,” Moore said, “which was completely irrational, that there was no reason for it, that this was, this was essentially a self imposed government shutdown.”
Moore has assured Marylanders that his administration is prepared for federal policy changes and has hired a consultant to help him gauge risks to state finances and to strategically respond.
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Members of Maryland’s federal delegation blasted Trump’s order.
U.S. Sen. Chris Van Hollen called the freeze unconstitutional and “an illegal abuse of power” in a statement. Maryland’s senior senator gave a long, but not inclusive, list of key programs he said could be crippled by the action.
Among those programs, agencies and services affected could be first responders, medical researchers, disaster relief programs, suicide prevention hotlines, substance abuse programs, child care programs, veterans’ health care services and small business loan programs, among others.
“This action by the Trump administration could block hundreds of billions of dollars in approved funding — sowing chaos nationwide, hurting American families and businesses, killing jobs, and undermining our national security and emergency preparedness,” Van Hollen said.
Meanwhile, state lawmakers have been saying for months that a Trump presidency could threaten key state programs. House Speaker Adrienne A. Jones said she’s working with the governor, attorney general, the federal delegation and state analysts to evaluate the full extent of the impact.
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”We know it will be far-reaching and likely will target our most vulnerable Marylanders,” she said in a statement.
“Here we are,” said Maryland Senate President Bill Ferguson, speaking with reporters on Tuesday, “and we’re seeing the negative impacts of what can happen when executive decisions are made that have a negative impact on Maryland.”
He called the order “a draconian approach to governance,” and said the order is so widespread that it’s not yet known all of the institutions that could face fallout.
“Any pause will have a negative impact,” he said.
Certain federal grants keep nonprofits operating, and pay bills and worker salaries. Ferguson said these organizations could experience serious, short-term consequences because they don’t have the assets that major institutions might.
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Ferguson said the federal stoppage served as a “backhanded” way of shuttering key programs, and unlike a government worker furlough, these programs’ funding may not be backfilled.
“It appears that a lot of these entities that do rely [on federal funds] could have to fold and close up shop,” he said.
For the short term, Maryland can cover the costs of lost federal funding because as money goes in and out of various state accounts, there’s a cushion of money available, said Sen. Guy Guzzone, who chairs the Senate’s Budget and Taxation Committee. But that plan relies on an assumption that the funding would be restored, as typically happens during federal government shutdowns.
”We have the ability to handle short-term stops that the federal government may do, assuming that it comes back,” said Guzzone, a Howard County Democrat. “So the question in this instance is: Will it? That’s the part we don’t know.”
And the state would be floating those costs while also trying to solve a $3 billion shortfall for the budget that begins in July.
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State leaders are also unclear about the scope of Trump’s order, specifically whether it would pause funding for Medicaid, the jointly state- and federal-funded health insurance program. The state gets about $9 billion per year from the federal government toward the Medicaid program.
”We don’t know about Medicaid,” Guzzone said. “It’s our single largest portion of federal funding. That’s something we’re going to be paying a lot of attention to.”
The lack of clear information has left state officials with more questions than answers.
”The bottom line is we don’t know how they’re interpreting any of it. We have to keep asking questions and try to learn as much as we can. At this point, there are some big gaps in clarity right now,” Guzzone said.
Medicaid system blocked
Maryland Health Secretary Laura Herrera Scott, speaking at a hearing in Annapolis Tuesday afternoon, said that the payment portal for Medicaid was not working. She said when her team tried to access some federal funds through the portal, they got an error message related to “system maintenance.”
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Herrera Scott said the federal Office of Management and Budget issued guidance saying that Medicaid and the Supplemental Nutrition Assistance Program would be excluded from the Trump administration’s pause in federal funding.
She said funding for the Special Supplemental Nutrition Program for Women, Infants, and Children, known as WIC, was accessible Tuesday. But when Herrera Scott directed her team to run a test for Medicaid, “it did not go through.”
The Maryland Department of Human Services uses the same system as the health department to access funds for the Supplemental Nutrition Assistance Program, or SNAP, and cash assistance. Their system experienced and outage for several hours, according to a spokesperson.
A statement from a White House spokesperson later clarified the system blackout was unrelated to the funding pause and that Medicaid payments would continue.
Baltimore responds
Baltimore Mayor Brandon Scott and the Baltimore City Council put out a joint statement saying they too were assessing impacts of Trump’s “unprecedented, politically-motivated” funding freeze that could put billions of dollars in city funding at risk. The city leaders said they are already in the process of suing the federal government.
“This order is nothing short of an intentional effort by the Trump Administration to cripple cities like ours in an effort to unilaterally and illegally achieve a blatantly political agenda within the federal government,” the statement read.
Nonprofits face funding losses
A mix of panic and confusion has set in at area charities. At Baltimore-based Health Care for the Homeless, President and CEO Kevin Lindamood said his staff struggled to access the system used to draw down federal funds.
Lindamood said Trump’s executive order successfully stoked “fear and confusion,” not just within his organization but in dozens of others throughout Baltimore that rely on federal reimbursement to provide basic necessities for low-income households. It remains unclear if the executive order applies to rental assistance or housing vouchers, and the first-of-the-month deadline for such payments is coming up fast.
To make matters worse, Lindamood said, another executive order prohibits federal agencies from communicating externally with their subrecipients, creating an information blackout at a critical moment.
“Nonprofit businesses can’t operate this way,” he said. “Congress or the courts must intervene to stop this reckless action and restore stability to safety net services, housing providers and the vulnerable people they serve.”
Elsewhere in Baltimore, Beth Benner, executive director of the Women’s Housing Coalition, said she has been trying to get answers about the potential impact on her organization since 6 a.m. when she first saw news of the impending freeze.
The coalition relies on federal funding, delivered via the city and through a contract with the housing authority, to place women who suffer from disabilities into permanent housing.
The Mayor’s Office of Homeless Services held a meeting Tuesday morning for contractors who pass through money for rental assistance, Benner said. On that call, city officials guaranteed that they would reimburse payments for February rent, which will be due in a matter of days.
“It’s unsettling to the residents who understand what’s going on. It’s unsettling to the staff,” she said. ”What’s going to happen to us?”
Benner said the freeze may have far-reaching consequences. Some landlords she pays for housing file for eviction immediately. Others — often those who can afford it the least — offer more grace.
“What the feds may or may not care about is not only would we risk more people becoming homeless, but now you have people who own buildings and mortgages who have problems,” she said. “Who is going to take those apartments over if organizations like mine go out of business? It’s going to have a ripple effect in the economy.”
Meals on Wheels of Central Maryland — which provides food to about 5,000 adults — warned there could be long-term fallout if its federal funding, through vehicles like the Older Americans Nutrition Program, is withheld.
Executive Director and CEO Stephanie Archer Smith said in a statement that eliminating that program “has the potential to do serious harm,” and that any disruption would have lasting effects on senior citizens.
It’s unclear — the White House press secretary could not answer yes or no — if programs like Meals on Wheels would be affected. Smith said Meals on Wheels would continue to try and meet the needs of its clients if indeed its funding was pulled.
Ashley Valis, chief operating officer for Catholic Charities of Baltimore, spent Tuesday trying to determine which services administered by one of Maryland’s largest charitable organizations would be affected under the funding freeze.
The Trump administration has been light on guidance, and Valis relied on a patchwork information system of other service providers and allies around the region.
”We are really concerned about the rapid pace of these executive orders and what that means for a whole host of our clients, from infants to the elderly and everyone in between,” Valis said.
Catholic Charities is Maryland’s largest privately run human services provider. It runs a homeless shelter and provides housing to seniors and other vulnerable groups though federal grants. There are also nutrition programs and medical services.
All of it may be at risk. Or maybe none of it.
As of Tuesday afternoon, there was no concrete way for Valis to know, she said.
“I would imagine they [federal agencies] are just as confused,” she said. “If they had details they would have shared them.”
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