Mississippi relies on federal money. How could loan, grant pause affect the state?
The Office of Management and Budget has temporarily paused almost all federal grant, loan and other assistance payments. The memo cited recent executive orders signed by President Donald Trump that target "foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal" and puts everything under the umbrella of "may be implicated by the executive orders" under the freeze.
How could that affect Mississippi? Details are still being worked out, but here's what we know so far.
OMB covers many areas of public funding that could have consequences for the state like school lunches, road construction projects, research carried out in hospitals and universities, the Supplemental Nutrition Early Assistance Program and health care.
Matthew J. Vaeth, the acting director of the OMB, said in the memo that committing and distributing funds will halt "to the extent permissible under applicable law." Open notices of new funding applications also will be stopped for the time being.
For every $1 paid in income tax in Mississippi, the state takes in $2.53 in federal funding," according to a SmartAsset review of state budgets published in 2022. The Magnolia State pulled more than 47% of state revenues from federal sources. It was the seventh-highest in the nation, and the state had the 11th largest percentage of federal workers.
'This is not a blanket pause on federal assistance and grant programs from the Trump administration,' White House press secretary Karoline said. 'However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars.'
Vaeth specified that individual assistance, Medicare and Social Security benefits will not be affected. According to Reuters reporting, about 23% of Mississippi residents get Social Security payments for seniors and surviving dependents as of 2022.
Leavitt said on Tuesday that food stamps will not be affected.
The U.S. Department of Education also said student loans and Pell Grants aren't part of the freeze.
According to the memo, the pause will give the Trump administration time to review programs and determine how to best spend federal money in a way consistent with the law and the president's goals.
"The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar. In Fiscal Year 2024, of the nearly $10 trillion that the Federal Government spent, more than $3 trillion was Federal financial assistance, such as grants and loans. Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities.," Vaeth wrote in the memo.
Senate Appropriations Committee Vice Chair Patty Murray and House Appropriations Committee Ranking Member Rosa DeLauro wrote to Vaeth Monday night, saying the proposal would "only further disarray and inefficiency" following a string of executive orders from Trump.
'The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country. We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law," they wrote.
On Tuesday, six Democratic-led states are planning to file a lawsuit, and and group representing nonprofits and small businesses have filed one in federal court. They argue the effect of a pause would be "catastrophic."
In addition to the review, federal agencies are directed to modify unpublished announcements of federal aid, take down any already published and, as allowed by the law, cancel awards that were were already granted if they don't align with Trump administration priorities. They are also directed to ID underperforming recipients and work to address problems, including cancelling awards.
The OMB administers the federal budget and oversees the performance of federal agencies.
Agencies under the executive branch include:
U.S. Department of Agriculture: Animal and Plant Health Inspection Service, the Food and Nutrition Service and the Forest Service.
The Department of Commerce.
The Department of Defense: Army, Navy, Air Force and Space Force.
The Department of Education.
The Department of Energy.
The Department of Health and Human Services: Medicare, Medicaid, the National Institutes of Health, the Food and Drug Administration and the Centers for Disease Control.
The Department of Homeland Security: Federal Emergency Management Agency, the U.S. Coast Guard, the U.S. Secret Service, the Transportation Security Administration and U.S. Customs Service.
The Department of Housing and Urban Development: Federal Housing Administration, the Office of Fair Housing and Equal Opportunity and the Community Development Block Grant Program.
Department of the Interior.
Department of Justice: Federal Bureau of Investigation, Drug Enforcement Administration, the U.S. Marshals and the Federal Bureau of Prisons
Department of Labor: Bureau of Labor Statistics and the Occupational Safety & Health Administration.
Department of State.
Department of Transportation: Federal Highway Administration, the Federal Aviation Administration, the National Highway Traffic Safety Administration, the Federal Transit Administration, the Federal Railroad Administration and the Maritime Administration.
Department of the Treasury.
Department of Veterans Affairs.
According to Grants.gov, more than two dozen agencies make grants, including Education, Transportation and Defense.
Trump has tapped Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency (DOGE). Initially, Musk said they could cut $2 trillion from the federal budget. However, that estimate has been downgraded to close to $1 trillion. (Multiple lawsuits have already been filed, arguing for transparency from the commission, and reports say Ramaswamy will step away soon to run for governor of Ohio.)
The federal government spent $6.75 trillion dollars in the 2024 fiscal year, according to the U.S. Treasury.
What programs or projects might be cut overall is still uncertain. For example, Project 2025, a conservative playbook developed by the Heritage Foundation, calls for Medicaid funds to Planned Parenthood to be eliminated because the program provides abortions in addition to other health care for women.
Trump initially distanced himself from Project 2025, but 31 of the 38 authors had ties to the president or his former administration, and he's chosen several authors for key roles in his new administration.
Vaeth cited, as examples of goal setting, the Trump executive orders tied to immigration, foreign aid, international environmental agreements, competition in the global energy market, ending DEI programs, defining biological gender and elective abortions.
"Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending 'wokeness' and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. 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."
Matthew J. Vaeth, the acting director of the OMB
A 51-page list provided by OMB separately from the 2-page memo lists programs like SNAP, WIC, Head Start, Low-Income Home Energy Assistance (LIHEAP), elder abuse prevention funds, food programs for K-12 students and Market News under the Department of Agriculture as some of the ones being paused.
Various disaster relief programs are on the list. A handful under DHS, includes: disaster grants for public assistance, hazard mitigation, community disaster loans and disaster unemployment assistance.
Programs affecting veterans being on the list include a housing rehabilitation and modification program, a suicide prevention grant and burial expenses.
According Reuters reporting, about 65% of federal spending goes to benefit programs:
Social Security: 22%
Medicare: 14%
Food and other safety net programs: 13%
Meidcaid: 10%
Veterans benefits: 5%
Affordable Care Act health plans (Obamacare): 1%
Other federal spending goes toward defense (13%), interest payments (11%) and other spending (11%).
More: Will Mississippi have daylight saving time this year? Trump says US should get rid of it
A WalletHub ranking shows Mississippi is the fifth state most-dependent on federal funds.
Overall, the state had a score of 63.39.
Residents were ranked seventh-most dependent on federal support in the nation, and the state government was ranked ninth in the U.S. The project looked at factors such as return on taxes paid to the federal government and share of federal jobs to determine residents' dependency. State-level dependency was based on the percentage of the state budget that came from federal funds.
WalletHub noted that states that voted Republican in the 2020 election had a higher dependence on federal assistance than those that leaned Democrat.
Mississippi also scored high for having both high tax rates and a low GDP per capita (or output amount per person).
The full length is not clear, based on the memo.
Payments will be paused at 5 p.m. Tuesday, Jan. 28.
Agencies can submit information about the programs subject to the pause until Feb. 10, and each program will be assigned to "a senior political appointee to ensure Federal financial assistance conforms to Administration priorities."
OMB could give exceptions for new awards or other actions on a "case by case basis." But some grants or projects might be up for total elimination.
Contributing: Steve Holland and Jasper Ward (Reuters), Bart Jansen
Bonnie Bolden is the Deep South Connect reporter for Mississippi with Gannett/USA Today. Email her at bbolden@gannett.com.
This article originally appeared on Mississippi Clarion Ledger: Pause on federal loans and grants starts soon. What you need to know
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