Update: Early Wednesday, the Trump Administration rescinded the order.
Hours after the Trump Administration ordered a nationwide freeze on the distribution of federal funds, some city workers reported Tuesday that they were already locked out of accessing federal money they normally rely on.
“Earlier today, when our city teams attempted to draw down funds for their federally funded homeless services, they found out they’ve already been removed from the system,” Long Beach Mayor Rex Richardson said Tuesday. “They weren’t able to access the system with no heads up and no notice.”
How widespread this freeze will be and how long it lasts are unclear in the wake of a Monday-night memo from the White House budget office that has rippled across the country.
In Long Beach, the move left locals trying to assess what could be affected, from housing vouchers to school lunches, from subsidized daycare to police grants.
The directive instructed federal agencies to temporarily cease “obligation or disbursement of all federal financial assistance,” to jurisdictions and organizations nationwide.
The two-page order from acting director Matthew Vaeth of the Office of Management and Budget attempts to halt as much as $3 trillion in federal grants and loans, which are used to fund anything from schools to fire stations, foster care and highways. Other examples mentioned include foreign aid and money for nonprofit organizations.
The Trump Administration has since said some buckets of money, such as Medicare funding, are exempt from the pause, but confusion reigned Tuesday as decision-makers sought to interpret the brief, vaguely worded document.
According to the memo, the temporary freeze is needed to make sure program spending comports with the President’s second-term priorities, which include “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.”
By contrast, the memo continues, “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.”
In response, Long Beach and other governments are pushing back, even as they scramble to assess how much money they can expect to lose if the order stands.
“This is unlawful, it’s unconstitutional, and we have every intention of fighting back,” Long Beach Congressman Robert Garcia said.
California Attorney General Rob Bonta is also among a coalition of 22 state attorneys general suing to block the order. In a separate case brought by an activist group, a federal judge agreed to temporarily block it as the legal battles continue.
(It’s so far unclear if the city and other agencies have regained access to the systems they reported being locked out of.)
Several city officials said it is still too early to tell how the order would affect Long Beach and Los Angeles County if it stands.
Federal funding covers a trove of city infrastructure projects — $111 million across 54 projects last fiscal year — but also some core services; it funds the majority — more than 80% — of the city’s Health Department, parts of its police and fire departments and sends millions of dollars into city welfare programs like shelter and affordable housing production. It also funds the city’s local universities and school systems, and makes possible major improvements to the city airport and seaport.
Past reporting by the Post found the city has already been promised — but has yet to receive — $524 million across 13 federal grants, with another 11 grants for $416 million it’s still competing for, of which could be lost.
Without those federal dollars, the city warns it would have to furlough or shutter other programs or find local funding to supplement it.
Richardson said staffers are conducting a citywide audit of departments and their federal funding to get a clear picture of how much they can expect to lose.
“We’re finding out as the day goes by, certain programs in question may be restored,” Richardson said. “It’s unclear. At this point, we haven’t received clear guidance on that. … Tomorrow we’ll have a more clear picture.”
In a statement, a spokesperson with Long Beach Unified School District said it received about $166 million in federal funding for the 2024-25 school year. It does not anticipate “any interruption.”
A spokesperson with Cal State Long Beach said administrators are “closely monitoring the situation and working to understand the details of the executive order and its potential implications.”
Geoff Green, CEO of the California Association of Nonprofits, said the group is currently surveying its 53,000 member organizations, to assess the impacts of the order.
Meanwhile, at Long Beach Day Nursery, which derives up to a third of its budget from federal funds and serves about 300 low-income kids annually, uncertainty looms over the security of their funding. While it fluctuates year to year, most of the school’s kids receive a federal subsidy to attend.
Jennifer Harper, who runs the school, reminded those in attendance at a press conference Tuesday that it has been around for more than 100 years. She remains hopeful that they find a way to survive no matter the outcome.
At the conference, Garcia called for an “immediate reversal” of the order, calling the move “drastic, confusing and chaotic.”
Since the early morning, he and others have fielded calls from nonprofit workers, teachers, parents and others, scared and demanding answers.
But it’s unclear what remains safe from the order, Garcia said. Despite assurances from the Trump administration that programs like Social Security and Medicare, student loans and scholarships, will not be affected, the congressman said he remains skeptical.
As an example, he said, the online portal for Medicaid, the federal government’s largest welfare program, “is completely shut down in all 50 states.”
“We’re talking about disaster assistance to cities that could be disrupted,” Garcia said. “Hospitals, doctors and providers are at risk. Cancer treatments, drug treatment programs all could be interrupted. Funding for schools and universities are in chaos. Suicide prevention programs can be halted. Meals on Wheels, which are critical to seniors, are uncertain of what’s next. And this has all been caused for no reason and no explanation and done in the middle of the night to harm the American public.”
Editor’s note: This story was updated to provide more detail about how much of Long Beach Day Nursery’s budget is derived from federal funds.