Fed Freeze Frenzy Leaves City, State In Chaos

(Updated) Elected officials and grassroots nonprofit leaders scrambled to figure out how to keep government and social services running at home amid a frenzied nationwide battle over a Trump administration plan to freeze federal spending.

Update: The Trump administration rescinded the freeze order memo Wednesday after a national outcry. A White House spokesperson stated that the freeze itself remains in effect.

A federal judge threw an extra twist of uncertainty into the frenzy late Tuesday afternoon by blocking a Trump administration freeze on trillions of dollars in federal spending just as it was about to take effect.

Meanwhile, Mayor Justin Elicker joined statewide officials in Hartford to update the public on contingency plans to keep government running amid what some called an ​“illegal” and ​“unconstitutional” seizure of public money.

Three hundred federally-funded city government jobs are at stake, according to Elicker. 

Update: On Wednesday, Elicker specified that a total of 85 full-time city employees and 247 New Haven Public Schools (NHPS) employees are fully federally funded. That adds up to around $10 million for the city and $40 million for the school district in related personnel costs. He said the city is still working on ​“drawing down” as quickly as possible the roughly $100 million in federal grant monies that could be implicated if this order returns. ​“What a waste of time and energy,” he said when asked about the Trump administration’s decision to rescind the memo.

At Tuesday’s press conference, before the federal memo was rescinded, the governor said the state’s rainy day fund might need to be tapped to cover up to $14.3 billion in lost federal aid.

The Downtown Evening Soup Kitchen, meanwhile, would need to figure out how to pay for all the people who staff its food and drop-in programs. While the housing authority would need to replace up to $1.5 million a month in federal aid for its programs.

People responsible for policing the streets, keeping small businesses open, repairing roads, feeding the hungry, representing the indigent in court, helping expectant parents give kids a ​“healthy start,” you name it — all spent the day consumed with getting information and plotting next steps.

“This is nothing less than highway robbery,” declared New Haven U.S. Rep. Rosa DeLauro. ​“This is worse than shutting the government down.”

The frenzy began in the wake of a memo that was sent out late Monday by the White House’s Office of Management and Budget (OMB) on Monday.

That two-page letter, written by OMB Acting Director Matthew Vaeth, states that, as of 5 p.m. Tuesday, federal agencies ​“must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” Whatever that meant in practice.

Minutes before the freeze was to begin at 5 p.m., U.S. District Judge Loren L. AliKhan placed a temporary block on it. What happens next is anyone’s guess.

Local, State Billions At Stake

Mayor Elicker joined state and federal lawmakers for the Hartford press conference just an hour before a 5 p.m. deadline to halt federal funding. State Attorney General William Tong announced that Connecticut is joining 21 states in ​“suing imminently” the Trump administration in federal court in Rhode Island for what he called an ​“arbitrary and capricious” order that violates the separation of powers.

State Comptroller Sean Scanlon, whose job is to track funding, said that his office is working to understand how Trump’s order will impact Connecticut. He said that the state receives $14.3 billion in federal spending that it then distributes all over. 

“That $14.3 billion is a lifeline of the people of Connecticut, and if that’s paused, people here will be hurt. We can’t have that,” Scanlon said.

Gov. Ned Lamont said that the state employs nearly 3,000 people whose positions are partially or fully funded by the federal government. Thanks to a surplus and robust rainy-day fund, the state can take care of those employees until next steps are figured out. 

New Haven, meanwhile, has 300 employees who are paid with federal funds, according to Elicker. Those employees are health inspectors, paraprofessionals, teachers. Elicker said that this is ​“terrifying” for staffers who don’t know their job status. Right now, he said, the city doesn’t have a cash-flow problem, so there’s no plan to start furloughing any employees tomorrow. (A mayoral spokesperson said he didn’t have an estimate yet of how much of the city budget comes from federal funds.)

“We’re gonna take it day by day,” Elicker said. 

Lamont agreed. ​“We have to see,” he said about next steps. ​“I don’t know what [executive order]‘s gonna come out tomorrow.” 

U.S. Rep. DeLauro, the ranking Democrat on the House Appropriations Committee, said that the very funds that Trump is halting were passed by Congress. ​“The president has no authority to interfere,” she said. She called the order ​“President Trump’s theft of taxpayer dollars.” 

DeLauro listed potentially impacted federal dollars: Women, Infants and Children (WIC); Title IX; special education funds; Head Start, home energy rebates; housing for the elderly and disabled; most programs under the Bipartisan Infrastructure Law; veteran programs; the Crime Victims Fund; community health centers; and substance abuse prevention. And more. 

She said that she’s heard that her constituents aren’t able to access the dollars that have been promised to them, that Head Start and Medicaid portals are down. She called it a clear attempt to interfere with the ​“lawful appropriations process.”

“People’s lives and their livelihoods are at stake,” she said. The Constitution makes it clear: ​“The power of the purse resides with the Appropriations Committee.”

On The Ground: Any Eye On CNN & Emails

Kimberly Hart, a co-founder of New Haven’s Witnesses to Hunger chapter, found out about the memo when she turned on her television at 6 a.m. this morning. 

She typically keeps CNN running all day in the background, she said. ​“I was like, ​‘Are you kidding me? By 5 p.m. today?’ Oh my god, what am I gonna do?”

Hart pays a majority of her rent through a Section 8 Housing Choice Voucher, which it turns out will not be affected by the freeze — a fact that hadn’t yet been certain when she spoke at around 4 p.m.

“If that is taken away, I don’t know what’s going to happen to me,” she said.

Hart soon found out, with the rest of the nation’s breaking-news-glued population, that state Medicaid and Medicare programs had lost access to federal payment portals across the country, including in Connecticut.

Hart receives her healthcare through both Medicare and Medicaid, while her 21-year-old son relies solely on Medicaid. ​“What’s going to happen to him?” she wondered.

For now, Hart said, she’s remaining ​“steady,” staying grounded through her faith. She intends to write to her political representatives.

“I haven’t lost it yet — because none of these things have came down yet,” she said. Her voice cracked. ​“When I lose my Section 8, then you can ask me where my emotions are, oh my gosh.” Only later in the day was it clarified that Hart’s rent would still be paid.

Downtown Evening Soup Kitchen (DESK) Executive Director Steve Werlin, meanwhile, found out about the memo from a mass email this morning sent by the Connecticut Coalition to End Homelessness. 

DESK has budgeted for about $250,000 in federal funding this fiscal year, Werlin said.

“My first action, of course, was to immediately to call up our funding partners at the federal level,” he said.

Tremendous uncertainty remains about the impacts of the freeze. Since the memo instructs federal agencies to collect and submit information about all affected federal grants by Feb. 10, Werlin said he expects to learn more about whether DESK will be affected after that point.

Federal funding is generally distributed to external recipients in the form of reimbursements. ​“Agencies never get the money upfront,” explained Werlin. ​“We are expected to spend that money down and then submit time sheets and receipts and basically prove that we spent this money.” 

So for DESK — and, typically, for other nonprofits and contractors — the freeze beginning at 5 p.m. Wednesday would not have immediately affected their ability to offer day-to-day services.

“I’m sort of holding my breath until mid February until we start hearing what the actual fallout is going to be,” said Werlin. ​“Until then, I don’t plan on making any changes. I’m going to work under the assumption that this will get figured out.”

Werlin said that all of DESK’s client-facing staff members receive their income at least partially through a federal grant.

“One of our staff members is fully funded by federal funding… This is someone who just yesterday was telling me that she worked with a client who came through our drop in center,” linking that client to a warming center and then, the next day, to a shelter.

“We have those outreach positions, these case management positions, simply because it is a difficult system to navigate and no one going through these circumstances should be going through it alone,” Werlin said. 

On the heels of a severe cold weather emergency, Werlin added, the entire network of housing and homeless services has the potential to be affected.

The freeze has put at stake $1.5 million per month that the Housing Authority of New Haven, along with its affiliated organizations under the umbrella group Elm City Communities, receives from the federal government.

Shenae Draughn, president of Elm City Communities, wrote in a statement that the organization is still evaluating which programs may be affected.

The statement indicated that public housing, resident programming, and capital project funding may be frozen. 

“According to the most recent information provided by the White House and OMB, individual assistance, including rental assistance, will not be impacted by this order,” Draughn wrote.

As the organization seeks clarification from the federal government, Draughn wrote that ​“in the interim, we will work with our ECC team to ensure the impacts on residents and our partners are minimized to every possible extent.”

“Even a short delay in the disbursement of federal grant and aid funding,” she wrote, ​“will cause far-reaching and devastating impacts on our residents and all affordable housing across the state of Connecticut and beyond.”

Meanwhile, New Haven Legal Assisstance Association (NHLAA) calculated that 28 percent of its budget, or a total of $1.8 million, is at risk, according to Executive Director Alexis Smith. Smith said that the funding at stake would primarily fund staff salaries and affect legal representation for tenants, the elderly, crime victims, and students in special education programs. 

Karen DuBois-Walton, the executive director of the Community Foundation For Greater New Haven, said she found out about the memo from a news report.

She said that the Community Foundation is able to continue funding its two federally-funded programs at least through Feb. 10, according to CEO Karen DuBois-Walton. 

One of those programs is New Haven Healthy Start, which provides a variety of social services including medical referrals, parenting classes, and lactation consulting to new or expecting parents. The program, which receives $5.5 million federal funding over five years, has one stated goal of addressing racial disparities in both maternal and infant health outcomes. (Between 2020 and 2022, Black babies were three times more likely to die than white babies in Connecticut, according to March of Dimes.) 

Another program at stake is the New Haven Equitable Entrepreneurial Ecosystem (NHE3), a small business support grant particularly for entrepreneurs who are women and people of color, which receives $2 million over the course of three years.

Both programs, which have goals of reducing racial disparities in health or economic outcomes, may be targets of an anti-“Diversity, Equity, and Inclusion” push by the Trump Administration.

Larger organizations like the Community Foundation ​“may be able to weather it for a long period of time,” DuBois Walton said, but for smaller non-profits, ​“a temporary freeze on their cash flow is going to be devastating.”

She said the foundation will work to rally community members to help ​“generate the support — and the dollar support — for non-profits,” though if massive pools of federal funding are paused, they will likely be impossible to fully replace. In the meantime, she urged other nonprofits to retrieve any outstanding federal reimbursements as soon as possible.

An earlier version of this article follows:

City Rushes To Understand Trump-$-Stop Fallout; Murphy: "This Is What A King Does"

New Haven scrambled Tuesday to discern how big of a hole President Trump just blew in the city budget, while federal representatives dialed up the outrage in D.C.

That was the reaction Tuesday to a memo that was sent out late Monday by the White House’s Office of Management and Budget (OMB) on Monday.

That two-page letter, written by OMB Acting Director Matthew Vaeth, states that, as of 5 p.m. Tuesday, federal agencies ​“must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

What does that mean?

Well, a lot of people don’t know. But they’re worried.

Mayor Justin Elicker told the Independent that all of the mayor’s office staff met Tuesday morning with City Hall coordinators, the city budget director, and corporation counsel to discuss the order’s potential impact.

As of 11 a.m., they still don’t know — but they’re hustling to find out.

“We receive millions of dollars of federal funding” to city public schools, through CDBG grants, to the Health Department, and so much more, Elicker said. Plus, there’s a lot of ​“pass-through money” from the feds that comes to the city through the state, and that the city passes along to nonprofits.

“Right now we’re trying to evaluate what kind of impact this is gonna have,” he said. He said his administration should have a better handle on the potential dollar and service impact later Tuesday.

“One particular concern for us is cash flow,” he said. ​“We receive regular reimbursements and payments from the federal government in grants.”

“It’s hard for me to say at the moment” exactly what the worst-case-scenario of this memo’s impact might be. ​“What we’re evaluating is, on the cash flow side, how quickly funding could potentially run out for” a whole host of city and city-supported programs.

New Haven’s current annual city budget adds up to nearly $680 million. It’s unclear right now how much of that budget would be impacted by Monday’s federal memo.

Elicker is slated to speak in Hartford at a 4 p.m. press conference about the federal funding freeze alongside Gov. Ned Lamont, Attorney General William Tong, Comptroller Sean Scanlon, and U.S. Reps. Rosa DeLauro, John Larson, Joe Courtney, and Jahana Hayes. 

Meanwhile, the city’s federal delegation made clear just how harmful this Trump administration decision could be.

“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” wrote New Haven’s U.S. Rep. Rosa DeLauro, who is the top Democrat on the House Appropriations Committee, along with Appropriations Committee Vice Chair and Washington State U..S. Sen. Patty Murray, in a Monday night letter to Acting Director Vaeth. ​“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.”

Connecticut U.S. Sen. Chris Murphy sounded a similar refrain in press conference held Tuesday morning by a handful of top Senate Democrats.

“This is an attempt by Donald Trump to seize power,” Murphy said. ​“What President Trump is doing is seizing control of the federal budget and deciding by himself who gets money and who doesn’t.”

“This is what a king does,” Murphy continued. ​“This is not how a democracy works.’

He concluded by describing this OMB move, combined with such executive orders as the pardoning of the Jan. 6 rioters, as constituting the ​“greatest constitutional crisis of our lifetime.”

Chuck Schumer of New York, the Senate Democrats’ leader, said in that same Tuesday press conference that ​“the blast radius of this terrible decision is virtually limitless, and its impact will be felt over and over again.”

This move could impact Head Start programs, cancer research, federal housing assistance, support for veterans, and, well, seemingly everything else the federal government funds.

“This is cruelty. This is lawlessness. This is a heist done on a national scale.”

In a separate email press release sent out Tuesday morning, Connecticut Attorney General William Tong also lambasted the Trump administration move.

“This is a full assault on Connecticut families– an unprecedented and blatantly lawless and unconstitutional attack on every corner and level of our government and economy,” Tong is quoted as saying. ​“Attorneys general across the country are preparing imminent legal action to protect our states. Connecticut and my team are front and center in this fight and will provide updates in real time to Connecticut as this unfolds. Today is not a day for politics– everyone irrespective of party should be standing with Connecticut against this devastating attack on our state.”