For Immediate Release
January 29, 2025
Contact: Kirstin Snow, snow@pennpolicy.org
Late on Monday, the Trump administration issued an executive order halting payment of grants and loans to state and local governments, social service providers, and others. This action is illegal and unconstitutional. And it is likely to cause immediate and widespread harm to people and families across our state and the country. It must be rescinded by the President as soon as possible.
There are still many uncertainties about the impact of the order. The U.S. Office of Management and Budget has issued a number of clarifications of it—however, they have done little to clarify the scope and intention of the order.
It appears now that funding for state and local programs that provide veterans’ services, ensure public safety, and help seniors will be halted. So will some funding for our school districts and federal support for child care as will funding for programs that protect our air and water from pollution, support our farmers, and provide help for those who are food-insecure. Funding for rental assistance and housing rehabilitation will be blocked as well.
In addition, organizations that provide direct services will lose funding. This means that some programs may not be able to meet their payroll in a week or two and others will have to borrow money at high interest rates just to stay open.
And whether it’s a student with disabilities unable to get support from their school district, a veteran who loses their transitional housing, a senior who can’t get a ride to doctor’s appointments, a family that loses renter assistance, or a city that can’t afford to pay its police officers, millions of people’s lives will be made much harder and may even be put at risk completely by this action.
The Pennsylvania state budget receives a total of $46 billion from the federal government to support a wide range of programs. While we believe that some of the largest of those programs—including Medicaid / Medical Assistance, Title I funding for schools, and Pell Grants—are not included in the funding freeze, we estimate that at least $14 billion of federal grants to the state is at stake. At the moment, we cannot precisely estimate the amount of federal funding of social service agencies that is at risk. But it is a great deal of money.
In addition to the damage that will be done to individuals and families, state and local government employees, and social service agencies, the sudden and unclear order will create chaos throughout our state.
And on top of all that, the order is both illegal and unconstitutional. It is an example of what was called in the 1970s “impoundment,” the practice by which the president and his administration withholds funds that have been authorized and appropriated by the Congress. The Impoundment Act of 1974 makes it illegal for the president to take such action without seeking approval of Congress and providing a reasonable rationale for the action. And in 1975, the Supreme Court ruled that impoundment was unconstitutional in Train v. City of New York.
The Trump administration’s action is not just deeply damaging to the people of Pennsylvania and the entire country but is deeply damaging to our constitutional and legal order. President Trump must immediately reverse the order to ensure everyone can continue to access the essential public services they count on to meet their basic needs.