Donald Trump’s push to freeze federal funds sparks confusion in Texas

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DALLAS — Confusion reigned in Texas as local governments, nonprofits and state agencies scrambled Tuesday to figure out just how deep cuts from President Donald Trump’s new push to pause federal spending could go.

A federal judge on Tuesday temporarily halted the Trump administration’s sweeping order minutes before the freeze on federal grants and loans was slated to take effect. Should the order go into effect as early as next week, leaders of Texas cities, counties, higher education institutions, public transit agencies and groups aimed at serving vulnerable populations will have to deal with a loss, however temporary, of federal dollars.

Little clarity about the breadth and depth of potential cuts emerged Tuesday, but a common thread did: the Texans most likely to be affected would be its least fortunate.

“The impact is on the people,” said Matthew Mollica, executive director of ECHO, the lead agency of Austin’s homeless system. “It's on real Americans.”

Major Texas cities like Dallas, Austin, Houston and San Antonio — which rely on federal funds to help tackle crime, housing unaffordability and homelessness, among other woes — clambered to tally the potential cost should the freeze take effect.

Houston City Controller Chris Hollins said his office is calculating how much of the city’s $6.7 billion budget could potentially get the axe if Trump’s freeze took effect — but a preliminary analysis suggests the city’s housing and public health departments would bear a substantial portion of any cuts.

“Every aspect of the city, from physical infrastructure to affordable housing to public health and even to policing, there’s a potential for serious negative impact,” Hollins said.

San Antonio gets about $325.5 million out of its $4 billion budget from federal funds — including money to build housing targeted at low-income families and help poorer households get rid of lead paint in their homes.

“If confusion and chaos were the goal — mission accomplished,” San Antonio Mayor Ron Nirenberg said on X. “These are your tax dollars being withheld from your communities.”

Unclear, too, is how Texas’ state budget would hold up if Trump succeeds in his push to temporarily halt federal funds. Texas budget writers expect $98.5 billion in federal dollars to help cover the cost of state health care services, public schools, higher education institutions and highway spending among other spending priorities over the next two years. Federal funds make up about 30% of the state’s upcoming $333 billion two-year spending plan.

Representatives for Texas Comptroller Glenn Hegar and the Legislative Budget Board said Tuesday they are trying to figure out what programs would be subject to Trump’s spending halt.

The chaos began late Monday when the White House Office of Management and Budget ordered all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.” The White House circulated a 51-page document asking federal agencies to review hundreds of initiatives — including rental assistance for low-income families, funding to house homeless veterans and grants for community policing efforts.

Agency officials were asked to answer questions like whether the programs included foreign assistance, “promote gender ideology” or “promote or support” abortion, among others.

The move prompted widespread confusion about which programs might be nixed, prompting the White House to insist that all programs where individuals collect benefits — like SNAP, Medicare and Medicaid — would not be paused. Rental assistance programs, Pell Grants, Head Start early childhood programs and small business grants, too, would continue. A White House memo said the pause is “expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”

"This is not a blanket pause on federal assistance and grant programs from the Trump administration," White House Press Secretary Karoline Leavitt said Tuesday. "People who are receiving individual assistance, you will continue to receive that, and President Trump is looking out for you by issuing this pause because he is being [a] good steward of your taxpayer dollars."

Trump’s move drew a sharp rebuke from congressional Democrats, who asserted that the pause was illegal and that the executive branch is legally required to disburse funds that Congress has already appropriated. Congress constitutionally controls the federal government’s purse strings.

“No new president has the right or the legal authority to do what President Trump did,” U.S. Rep. Veronica Escobar, D-El Paso, said. Escobar sits on the House Appropriations Committee. “These domestic programs create jobs, they save lives, they improve health, they improve the air, they improve the water, they build roads.”

The White House has said it was not halting congressionally appropriated funds, and that the pause was merely to reassess whether programs align with the president’s agenda. The administration told Congress the pause could be as short as one day.

U.S. Rep. Marc Veasey, D-Fort Worth, called the pause a “bullshit” move to mask that Trump doesn’t have a plan to cut unnecessary spending.

“If President Trump wants to find ways to cut unnecessary spending and lower costs — we’re right here,” Veasey said in a statement Tuesday. “Work with us. In the meantime, stop messing with our veterans, our hospitals and our kids’ education.”

Confusion over the potential freeze extended beyond Washington.

The state’s higher education institutions also assessed what a pause could mean for students and research endeavors.

Before a federal judge paused Trump’s move, Texas A&M University President Mark A. Welsh III, told faculty and staff in an email Tuesday afternoon that federal agencies have already begun reaching out to the university with initial guidance.

Officials at the University of Texas at Austin instructed researchers to continue work on already funded projects.

“Even so, at this time we do not believe it is necessary to pause federally funded research activities unless you have received a stop-work order from the federal sponsor directly,” Daniel Jaffe, vice president for research, wrote in an email obtained by the Austin American-Statesman. “We currently expect the pause to be lifted within a few weeks, at which point reimbursements will resume for work funded by federal grants and cooperative agreements, and the university will be able to recover the funds it has advanced.”

Texas’ social service agencies including the state Health and Human Services Commission, which manages billions in state and federal aid to low income Texans, did not answer questions about whether their agencies were unable to access federal funds, specifically when it comes to their largest programs: Medicaid, the Children’s Health Insurance Program (CHIP) or the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.

In Texas, 3.6 million residents receive federal food assistance, and those dollars, dispensed on a debit-like Lone Star Card, are spent at grocery and food retailers throughout the state. In November, more than $642 million in Texas SNAP transactions were made to retailers, according to Texas HHS. In the fiscal year that ended on Aug. 31, more than $7 billion in SNAP funding was distributed to Texans.

More than 4 million Texans, mostly children, are enrolled in the Medicaid and CHIP programs. Those programs pay for health care mostly for low-income residents, including children, their mothers and elderly Texans. In the state’s current two-year budget, Medicaid’s budget is $80.9 billion, most of that from the federal government.

A staff memo obtained by The Texas Tribune from Dr. Jennifer Shuford, the Department of State Health Services’ commissioner, told workers little information was available about the freeze and impact on services.

“This morning we learned about the federal government’s plan to freeze federal grants and loans as part of a review of spending,” Shuford said in the memo. “While we do not know the details about whether or how these plans affect DSHS, I want to assure you that everyone will get their January paycheck on February 1st.”

If the freeze resumes, it could have a disproportionate impact on rural communities, where about 3 million Texans reside, said Ashley Harris, director of policy and advocacy for the United Ways of Texas.

“Rural nonprofits and communities often have fewer funding options,” Harris said. “Relying on federal grants is really critical to filling in the gaps for local services.”

Disclosure: Texas A&M University, University of Texas at Austin and United Ways of Texas have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.