On Monday, President Donald Trump’s acting director for the Office of Management and Budget (OMB), Matthew Vaeth, sent out a memo effectively freezing all federal grants, loans, and other forms of financial assistance. The memo, which was initially interpreted to threaten such fundamental social programs as Medicaid and Social Security, was met with widespread criticism, confusion, and panic.
Washington State Senator Patty Murray minced no words, describing it as “brazen and illegal.” On Tuesday, Federal Judge Loren AliKhan of the District of Columbia issued a last minute injunction blocking the move. Then on Wednesday morning, Vaeth followed up to say the initial order was rescinded. Shortly after that, Trump’s pugnacious new spox, Karoline Leavitt, chimed in to say the order was not in fact rescinded, only the OMB memo.
As far as we can tell, Trump did not issue any executive order related to federal grantees and loan recipients. There was only ever the OMB memo. See if you can make any more sense of her tweet about it than we can:
This is NOT a rescission of the federal funding freeze.
— Karoline Leavitt (@PressSec) January 29, 2025
It is simply a rescission of the OMB memo.
Why? To end any confusion created by the court's injunction.
The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented.
Either way, while the money tap remains on, albeit threatened, Sen. Murray warned that, “this fight is far from over; the Trump administration is still illegally withholding funding for communities in red states and in blue states.”
Senate Republicans, she noted, are still eager to confirm Russ Vought, the man behind Project 2025, a right-wing plan to dismantle the government and rebuild it in a Christian Nationalist image.
So what would happen here in Washington if Trump, Vaeth, and Vought do eventually get their way? Would people on Medicaid be denied coverage for lifesaving medication? Would teacher paychecks bounce? Would society collapse?
Not immediately, according to State Treasurer Mike Pellicciotti. While all that could eventually happen, we can hold out for a bit, provided we keep plentiful cash reserves and maintain our already excellent Moody’s AAA credit rating.
“The [efforts] of the Trump administration to coerce states and other governments—it's going to come through federal finances,” Pellicciotti said. “And this is just the start of that. That's why we need to focus so much as a state on preserving our reserves and maintaining our state's credit so that we not only have the funds necessary to fill gaps in an emergency situation, but with our strong credit ratings, we're also able to borrow money in a pinch if it comes down to that.”
However, one has to wonder just how long we can hold out, even with ample rainy day money and borrowing power. Per data compiled by Pellicciotti’s office during last year’s election, when Project 2025 first reared its ugly head, Washington State gets a whole lot of money from the feds. Around $27 billion a year, to be exact.
And that’s just the state. Nearly every municipality, county, and major nonprofit in our state gets at least some federal grant funding. The City of Seattle is slated to get about $29 million in housing and homelessness related grants in 2025, for starters. In the most recent fiscal year, Seattle pocketed $207 million in federal funds, including a $50 million chunk from the temporary Coronavirus Relief package.
United Way, an organization that funds a whole lot of smaller local nonprofits, gets at least $750,000 a year, the threshold at which organizations qualify for a yearly federal audit. Wildfire disaster relief and restoration efforts in Eastern Washington rely heavily on federal funding. Washington State Ferries, the largest commuter ferry system in the country, is barely keeping it together and doing so in part thanks to $140 million in federal grants over the last two years. About 12,000 children in our state receive federally subsidized childcare every month.
Even the Downtown Emergency Services Center depends on grant revenue for the lion’s share of its funding. Federal funding is so ubiquitous that nearly every institution keeping society chugging along at a somewhat normal pace depends on it.
“I can’t sugarcoat it,” Pellicciotti said, of the original order, “withholding of federal dollars has a huge impact and not just [on] the economy and state finances or government. It has a huge impact on people's everyday lives.”
As dire as things might get, plenty of our most essential agencies are already prepared. The Seattle Housing Authority is a good example of this.
“Federal housing dollars make up the largest source of operating revenue for the Authority and the principal source of funding for public housing capital,” the agency wrote in its 2022 annual report. That year, it took in about $255 million in federal money for operations.. As bad as a $5 million per week hole in the operating budget of our city’s main provider of public housing might sound, it would take a very long time for any low-income families to be negatively affected.
Susanna Linse, a spokesperson for the agency, said shortly after the freeze was first announced that the agency “has operating reserves to continue our work through and beyond February 10.”
She also noted that “SHA has received OMB guidance that the freeze noted in the memorandum does not impact the rental assistance for SHA’s residents or Housing Choice Voucher participants.”
(Full disclosure: My mother, Kerry Coughlin, is SHA’s director of communications.)
Indeed, an interesting part of this whole freeze saga was that the Trump administration, after issuing a pretty fucking bold, big boy executive order, almost immediately walked it back to make clear that it wasn’t planning to pause all the popular stuff. Or, to put a finer point on it, the duct tape and wire holding our economy together and/or keeping us all from rioting.
Before giving up on the whole thing, the OMB sent a follow-up memo promising that, “any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare —already explicitly excluded in the guidance—mandatory programs like Medicaid and SNAP will continue without pause.”
They also gave a pass to Pell Grants, Head Start, rental assistance, and a slew of other forms of direct government assistance. As our state’s fearless mom in tennis shoes put it, “Not even 24 hours later, they are issuing new guidance trying to clean up the massive mess they have made.”
Murray is most certainly not wrong there. The follow-up memo did further damage control by emphasizing that the review was temporary and that it was specifically focused on bringing grantees and loan recipients into compliance with Trump’s other wackadoo executive orders, which have taken direct aim at the basic right of trans people to exist and such unpopular policies as converting to clean energy before we’re all burned off the face of the fucking planet.
Per the Washington Post’s handy tracker of what was and wasn’t officially subject to the now-hypothetical freeze, the programs most at risk were research efforts, clean energy incentives, and discretionary education grants, which go to such unpopular programs like after school care and the Special Olympics.
Essentially, the fine folks at Project 2025 — err, the OMB — have promised that so long as you’re not getting federal money to run free curling lessons for illegal immigrants, you’ll get your grant back soon enough. It might beggar belief that our federal government, even under the astute leadership of the guy who paid to get boosted in Path of Exile 2 during the inauguration, could complete a comprehensive review of all federal grantees before vitally important programs ran out of cash and closed up shop, but sure, whatever, it was only meant to be temporary.
That said, the real takeaway here is that our sitting president came dangerously close to tanking the economy over some culture war bullshit. The weird right-wing accounts celebrating this shit online are not at all concerned with government spending. If they were, they’d be tweeting about the mission incapable F-35, now projected to cost taxpayers $2 trillion over its lifetime, instead of shit like this:
The solution? Everyone get a job and put away your begging bowl.
— richard (@richwink1) January 28, 2025
What it’s really about is, as it always is for these MAGA ghouls, owning the libs. The thing is, if they think that ending research grants in service of rooting out “Marxist equity, transgenderism, and Green New Deal social engineering policies” is going to do anything concrete, anything besides enraging their online enemies and putting a few professors out of work, they’ve got another thing coming.
Like, if you think DEI programs are silly and that victims of natural disasters, homeless people, and people suffering from opioid addiction should just pull themselves up by their bootstraps, you’re entitled to your misanthropic opinion. But you have to at least recognize that math-wise it makes a lot more sense to ax the F-35 program first, right? Right!?
Actually, no, you get a pass on this one. We are the most aggressively propagandized nation on earth, and since well before the term “welfare queen” was ever coined, we’ve been told that it's the poor causing problems in our country when it’s really the rich. If you’re reading this though, take this as your last pass. Illegal immigrants didn’t take our jobs, the corporations moved them all overseas to exploit less organized and more desperate workers. There is no world in which even the silliest, most superfluous federally funded nonprofit is to blame for our $36 trillion deficit or the increasingly brutal economic conditions facing workers.
That blame lies squarely on private equity, corporate tax cheats, and people like Elon Musk, the idiot billionaire behind this government waste witch hunt. Tesla and associated companies have taken in $333 million in federal grants and tax credits. The company also enjoyed a five-year period where they paid $0 in federal income taxes. In fact, they even got a $1 million refund. Maybe Musk should start his anti-spending crusade at home, in front of a mirror.
Anyway, the long and the short of it is that there’s not much we as Washingtonians can do here besides worry. We didn’t vote for the guy doing this, we did vote for an entirely blue state legislature and executive branch (including Attorney General Nick Brown, who quickly and successfully sued to block this thing), and we don’t get to vote for anything besides social housing (vote “Yes” and “Option 1A,” please) for awhile.
But we shouldn’t worry. Trump knew full well he couldn’t get away with this. He did it to sow confusion and create chaos. He did it to keep us looking the wrong way. Instead, we should look this dead in the eye. We all know who’s bankrupting the country, and it ain’t the DEI hires.