Trump's federal aid freeze sparks confusion and anxiety in Arizona: What to know

USA Today

29-01-2025

President Donald Trump set off a political whirlwind when his budget office released a memo announcing that some federal spending would be frozen the following day.
The Monday announcement sparked chaos as state and local governments, nonprofits and other stakeholders tried to figure out what exactly would be on the chopping block.
The funding pause was scheduled to go into effect on Tuesday afternoon, but was temporarily blocked until Monday by a federal judge.
Though the order is temporarily on ice, uncertainty still swirls around which programs exactly will and won't be affected should the order go into effect.
Though the orders didn't go into place, Tuesday saw some hiccups and interruptions in Arizona, with temporary outages to Medicaid and Head Start.
Here's how the saga has played out so far, and what's next for Trump's proposed funding freeze.
Why does Trump want to freeze federal aid?
Trump and his allies have promoted the federal funding freeze as a way to make sure that U.S. government spending aligns with the mandate he campaigned on and began implementing since taking office.
A memo penned Monday by the acting director of the Office of Management and Budget foregrounded hot-button issues such as gender, climate and socially progressive policies.
'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,' the memo reads.
It creates a roughly two-week window for the federal government to review and re-approve that spending.
The funding freeze did not affect funding that is provided directly to individuals — such as Medicare and Social Security — but other details about its scope remained unclear. Initially the Budget Department circulated a memo requesting information on programs such as low-income economic assistance and food programs, Politico reported.
In follow-up guidance released Tuesday, the office clarified that the freeze will only impact programs that are related to the flurry of executive orders Trump signed when he took office. Stakeholders said it was still hard to tell what exactly falls into that category.
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Medicaid, Head Start saw disruptions, but won't be paused
Though the funding freeze was directed at programs affected by Trump's recent executive orders, Tuesday also brought interruptions to government operations which appeared to fall outside that scope.
The online portals through which states receive federal Medicaid funding were down on Tuesday morning, despite guidance from the Trump administration that the program would 'continue without pause.'
Trump Press Secretary Karoline Leavitt said the White House was aware of website outages but said that Medicaid payments were still flowing.
Christian Slater, a spokesperson for Arizona Gov. Katie Hobbs, said that the state did not have access to federal Medicaid dollars, which fund about 70% of Arizona's Medicaid program, as the clock ticked toward the funding freeze deadline. The website was back up and running later that afternoon, he confirmed.
White House officials told CBS News that the Medicaid outages were unrelated to the federal funding freeze.
Head Start, a federal program that provides early child care for low-income families, also saw outages Tuesday despite assurances from OMB that it would not be affected. The program's grantees reported being locked out of the payment systems that they usually use to draw down grant funding.
Kelley Murphy with the Arizona Early Childhood Alliance said "all hell broke loose" when OMB released its guidance, in part because there was no clear way to request an exemption from the funding freeze.
It was unclear to her why the Head Start portal was blocked before the freeze was supposed to go into effect. National child care advocates told CNN they believe it was related to Trump's order.
"All of this stuff is programs that impact young children," she said. "I am fearful that this will harm children in our state."
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How will the funding freeze impact Arizona?
In the hours before Trump's orders were put on ice, stakeholders were still trying to understand which programs exactly would be affected.
U.S. Rep. Greg Stanton, a Democrat who represents much of the East Valley, argued it would have "immediate and dangerous consequences in Arizona."
Allison Childress, a Stanton spokesperson, said his office fielded concerns from around the district all day Tuesday.
That included queries from from health centers, who were weighing whether they would need to furlough or lay off staff; a local homelessness organization that was unable to draw their monthly reimbursement from the federal government; business development groups who had paused their workforce development programs; and constituents who work on federally funded research at Arizona State University, Childress said.
Allies of Trump argued the impacts of the funding freeze were exaggerated in the media.
U.S. Rep. Eli Crane, a Republican who represents much of northeastern Arizona, accused Democrats of 'needlessly scaring hardworking Arizonans by perpetuating lies for raw political gain.'
In an email Tuesday afternoon, the White House communications team accused the media of a 'Fake News Hoax.' They pointed to the OMB guidance released earlier that day which clarified that programs such as Social Security, Medicare, Medicaid and SNAP were excluded from the pause in funding.
Arizona government stakeholders brace themselves
Other government stakeholders preemptively took steps to prepare for the funding freeze — some of them going beyond what feds had warned them to do.
Tom Horne, the Arizona superintendent of public instruction and a Republican, said he had received notice that the funding review wouldn't apply to "Title I" economically disadvantaged schools.
'Nevertheless,' he wrote, 'because there are many details yet to be clarified, as a contingency I have directed this department to draw down the funds needed during the two-week period covered by the federal pause.'