Before the White House rescinded a memo Wednesday, Jan. 29 that ordered a freeze on disbursing money from federal grants and loans, local governments, universities and non-profit organizations across the country scrambled since Monday’s order to understand what it meant and to come up with plans for how to continue without or how to replace the lost money they need to provide services to their communities.
According to a USA Today story, the memo didn’t specify how much money was at stake, but it did say that “federal financial assistance totaled $3 trillion in fiscal year 2024.”
U.S. President Donald Trump signs documents as he issues executive orders and pardons for January 6 defendants in the Oval Office at the White House on Inauguration Day in Washington, U.S., January 20, 2025.
Also in the days since the Office of Management and Budget issued the memo, a federal judge blocked its implementation — originally at 5 p.m. Jan. 28 — on Tuesday until Monday, Feb. 3 in hearing a lawsuit brought by nonprofits; 22 states and the District of Columbia sued to block the policy, with a different federal judge set to consider that lawsuit Wednesday; and legal scholars denounced the order as unconstitutional because the constitution delegates spending to the legislative rather than the executive branch.
But that doesn’t appear to end the Trump Administration’s intention to withhold some federal dollars. As USA Today reported Wednesday, White House press secretary Karoline Leavitt said in a statement to reporters that “Trump’s other executive orders on federal funding issued since Inauguration Day will ‘remain in full force and effect and will be rigorously implemented by all agencies and departments.'”
On Wednesday, Tribune reporters spoke with several local agencies to find out how a freeze on federal money would affect them. Here’s what some of them said:
City of South Bend
For South Bend Mayor James Mueller, he hopes future “sweeping executive orders” involve more thought to their legality and constitutionality, so “they’re achieving something other than chaos.”
Mueller said “tens of millions” of dollars in federal contracts are put into question in areas such as Community Development Block Grants, HUD contracts for grants to support affordable housing, Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants, and grants with HUD for the Lead Safe program to pay for repairs for homes with lead-based paint hazards.
“Across the political spectrum, we can agree there’s reforms that are long overdue in the federal government,” Mueller said. “We know that with the deficit, we can’t continue to spend the way we have. But these types of programs aren’t necessarily what’s driving the deficit … So, if you’re looking to balance the budget and do reforms of the federal government, don’t go after the things that are right.”
Mueller said he believes South Bend residents and the federal government support affordable housing, funding for gun violence reduction, public safety and street infrastructure. Future federal-local contracts for such things as digital broadband can give residents the means to function in the future.
South Bend Mayor James Mueller gives a special recognition the Pokagon Band of Potawatomi during the 2025 Dr. Martin Luther King Jr. Community Service Recognition Breakfast at Century Center on Monday, Jan. 20, 2025, in South Bend.
For example, the city has signed contracts for a $3 million RAISE study grant for removal of the on- and off-ramps on the Eddy Street/Indiana 23 bridge over the St. Joseph River followed by replacement with a street network. The federal portion is $2.4 million with $600,000 in local funding.
The city also has a $1.87 million signed U.S. Dept. of Agriculture Urban and Community Forestry contract for urban tree nurseries for improvements to the urban tree canopy.
Often, Mueller said, contracts like ones for affordable housing operate where the city accepts the federal contract and then contracts with local agencies that will do the planning and construction, all while the city is relying on the federal government to fulfill the contractual obligations.
The agency sub-contractors “have land, they’ve got construction contractors to build the houses, so they’re on the hook for all those costs, expected to be reimbursed by the city, which we’re expecting to be reimbursed by the federal government,” Mueller said. “This affects a lot of folks we work with and partner with across the community.”
The mayor believes that much of the chaos created by the threat of the funding freeze would not pass muster with the contractual obligations the federal government has with many programs.
South Bend Police Department
The South Bend, Mishawaka and St. Joseph County police departments were all awarded funding of varying amounts by the Department of Justice. In South Bend’s case, the money was spent in January on the assumption it would be reimbursed with the grant.
“If these things would fall through, then these projects could potentially be at risk unless the department can budget appropriately or the city feels that we need to move forward with those purchases,” said Sgt. Aaron Knepper, who handles grant applications for South Bend Police and the St. Joseph County Police Department. ” … It may have to be a conversation at a later time, should the federal government decide these grants are no longer gonna be funded,” he said.
Local departments have planned to use the money for safety equipment, including water rescue equipment and AEDs, as well as new firearms and other equipment.
REAL Services
The freeze doesn’t immediately affect programs for senior citizens at the nonprofit REAL Services, which runs various government-financed programs including Meals on Wheels, President and CEO Karla Fales said.
But she said the funding disruption could still have “devastating consequences for those most in need.”
She said the freeze could likely affect home energy assistance, foster grandparents’ programs, housing stability programs and financial empowerment services.
In those areas, for now, Fales said, REAL Services has paused hiring and new activities. It’s watching to ensure that it can draw money that the feds had already disbursed to the states. And the agency has begun to assess how long it can operate certain programs without the continued release of federal dollars for which it had already signed contracts.
Beyond the freeze, Fales said, she’s concerned about other executive orders and “potential funding shifts” that “create chaos” and that may cut or delay energy assistance and Community Services Block Grants.
“This funding pause threatens the health and stability of our most vulnerable community members,” Fales said. “We urge federal leaders to act swiftly and ensure that critical services remain available to those who rely on them.”
In 2024, she said, 15,000 people tapped into its programs for housing and basic needs. Also, the nonprofit’s Aging & Disability Resource Center helped more than 30,000 individuals, and nearly 4,000 caregivers relied on its Alzheimer’s and dementia programs.
South Bend Community School Corporation
“At this time, to the best of our knowledge, public school districts in the State of Indiana, including the South Bend Community School Corporation (SBCSC), have not received any formal directive regarding the suspension of federal grant funding,” the corporation said in an emailed statement. “However, the potential for a future pause or freeze on these grants poses a significant risk of adverse consequences for all Indiana public school districts, including SBCSC.”SBCSC is a significant recipient of federal grants, including, but not limited to, those supporting Special Education, Pre-K Special Education, Adult Education, Career and Technical Education (CTE), Title I and other Title programs, as well as Food and Nutrition Services. In the 2023-24 academic year, SBCSC received over $80 million in federal grant funding.”These grants play a critical role in supporting numerous instructional programs within SBCSC. Approximately 300 positions in the district are currently funded through federal grants, including a substantial number of certified teaching positions and essential instructional support staff.”Given Indiana public school districts’ reliance on federal grant funding, a prolonged pause or freeze on these grants would have a similarly detrimental impact statewide. The inability to access or receive reimbursements for awarded federal grants would strain these districts’ financial resources.”
A spokesperson replied via email, “We were not anticipating an impact at this time even before the grant freeze was rescinded.”
St. Joseph County Department of Health
The St. Joseph County Department of Health doesn’t expect any hiccup in its programs because of the federal funding freeze.
The county’s health officer, Dr. Michelle Migliore, said most of the department funding comes from the state. Three programs rely on federal grants, each of which comes as a reimbursement after the expenses are made.
The department has already been reimbursed by its emergency preparedness grant, she said. And the department already knew that its grant from the U.S. Centers for Disease Control and Prevention — which supports the community health workers — would end this year. So, Migliore said, the department is prepared to draw funding for that from the state’s Health First Indiana program.
The third federal grant covers supplies and staff for children’s vaccinations. Migliore said the department would be able to shift its budget and, for example, draw from capital funding instead if it needed to cover any shortfalls.
Food Bank of Northern Indiana
The Food Bank of Northern Indiana, which distributes food from the U.S. Department of Agriculture to partner agencies in six northern Indiana counties, hasn’t heard whether it could be affected by a possible federal funding freeze.
“We haven’t heard anything yet, so it’s business as usual right now,” said Marijo Martinec, executive director and CEO of the agency. “But if funding is cut, it would be very impactful.”
Largely because of inflation, the need for food assistance has gone up in recent years, Martinec said.
“We saw a 12% increase in the number of households served from 2023 to 2024,” she said.
“This is food for Americans going out all across the country,” Martinec said. “Unless you’re in need, very few people are willing to wait in a sizable line to get a box of food.”
This article originally appeared on South Bend Tribune: South Bend agencies react to federal freeze on grant money
