Trump’s on-then-off funding freeze creates anxiety, whiplash for Minnesotans

Two days after the Trump administration announced plans to freeze trillions of dollars in federal funding the president Wednesday rescinded the memo that had sent Minnesota agencies, service providers and community members spiraling over potential cuts.

But injecting further uncertainty into the chaotic situation, White House Press Secretary Karoline Leavitt said that while the memo was withdrawn, the federal scrutiny of programs would continue. The announcement came after a federal judge temporarily blocked the freeze until next week.

The administration had planned to halt wide-ranging grants and loans as it looked at whether spending aligned with President Donald Trump’s executive orders on issues like climate change and diversity. The White House Office of Management and Budget had shared a spreadsheet of roughly 2,600 programs under review. The list included many that Minnesotans rely on, from Section 8 housing assistance to help for people to pay energy bills.

The lack of clear information has created “so much anxiety” as people tried to figure out whether grants they use could be affected and what it would mean for Medicaid, said Sue Abderholden, who leads the National Alliance on Mental Illness of Minnesota.

“It also woke people up to say, ‘Actually federal dollars and federal grants have a huge role to play in our communities and in our state,’” she said. “They support people in all sorts of ways, whether it’s housing or food or mental health or health care, criminal justice.”

Amid the whiplash coming from the White House, some of the federal portals that service providers use to access funds were temporarily blocked, and a number of Minnesota organizations found they could be in the line of fire.

Some Minnesota housing service providers said they were locked out of the Housing and Urban Development portal that many organizations use to request and access payments. Organizations on Tuesday and much of Wednesday received a message saying they were attempting to access the site outside of normal business hours — even during normal hours.

The system was back online late Wednesday afternoon, said Caroline Hood, CEO and president of the affordable housing and addiction treatment service provider RS Eden.

The Minneapolis Public Housing Authority was among the groups temporarily locked out. Executive Director and CEO Abdi Warsame said they can use reserves to weather temporary disruptions without interrupting services to residents.

Britt Heinz-Amborn, homeless management information systems director at the Institute for Community Alliances, said her organization, which runs databases for the homeless response system in several states, relies on HUD for about 70% of its budget.

“We are now trying to get paid for work that we did in December, but we can’t,” Heinz-Amborn said.

Minnesota Housing Finance Authority doesn’t access payments through the portal and its programs haven’t been disrupted, Assistant Commissioner James Lehnhoff said.

Trump’s freeze would’ve affected money that helps some Minnesotans pay home energy bills, according to the state Department of Commerce, which administers the federal program.

Most of the cash is distributed as grants based on income and the cost of energy. The program also offers “crisis” payments to households facing disconnection and emergency repairs.

The program typically helps about 130,000 Minnesota households a year.

In many cases, energy assistance has already been distributed for the year, said Annie Levenson-Falk, executive director of the nonprofit Citizens Utility Board of Minnesota. “I would hope that they wouldn’t come back and say, ‘We’re going to take your assistance back out of your utility account,’ and all of the sudden now you owe money that was already paid.”

It’s possible the state could be prevented from giving out crisis grants, she said.

Xcel Energy spokesman Theo Keith said if the energy assistance program was paused, the state’s Cold Weather Rule prohibits utilities from disconnecting electricity or heat until April 30.

Section 8 housing vouchers subsidize housing costs for low-income people. The Minneapolis and St. Paul housing authorities alone administer more than 12,000 vouchers.

However, the U.S. Office of Management and Budget said rental assistance wouldn’t be paused.

“There was a lot of fear yesterday,” said Sue Speakman-Gomez, president of HousingLink, which helps people find affordable homes.

Providers and organizations that advocate for low-income and vulnerable people who receive services through Medicaid remained wary. Roughly 1.3 million people were enrolled in Minnesota’s Medicaid program last year.

Minnesota Department of Human Services officials noted they were unable to access the Medicaid payment system for part of Tuesday but said access was restored Wednesday. The White House said in a statement that no payments were affected.

In a letter to DHS staff Wednesday, Commissioner Jodi Harpstead said there’s still a lot of confusion and ambiguity around Trump’s orders.

“We know that this unprecedented and deeply problematic suspension of federal funding would have wide-ranging impacts and real consequences for Minnesotans, including many of our colleagues whose salaries are funded with federal grant dollars,” she wrote, adding that they are working with the Minnesota Department of Management and Budget to gather data about the extent of the impact if the administration is allowed to move forward.

States also ran into issues accessing funds for Head Start, which support child development and school readiness for young children.

A spokesperson for the Minnesota Department of Education said Tuesday the agency didn’t have access to the payment portal for a while but on Wednesday things appeared to be back to normal.

Twin Cities Recovery Project works with the Minneapolis Fire Department to provide addiction services to people with opioid use disorder out of the fire station on Lowry Avenue. On Tuesday, CEO and co-founder LaTricia Tate said the fire chief called to tell her they were locked out of the federal reimbursement portal they use to pay the organization’s staff.

Tate said staff offered to volunteer their time as the issue was sorted out. They have served thousands of people at the fire station over the past couple years, she said, and “nobody wants to turn their back on the community.”

She said Wednesday that the chief told her they regained access to the payment system.

The St. Paul-based Center for Victims of Torture, which works with torture victims and their families around the world, said in a statement that it started to get stop-work orders last Friday from the U.S. State Department — separate from the federal funding freeze — and had to halt multiple international programs and furlough most of the staff.

The center also noted that some of its U.S. programs are funded by the grants that the White House planned to pause.

“The whiplash alone associated with these kinds of sudden, erratic, and confusing developments is deeply harmful to torture victims and the other beneficiaries we serve,” said Scott Roehm, the Center’s director of global policy and advocacy.

The funding freeze “sure scared a lot of our band members and employees,” Bois Forte Band of Chippewa Vice Chair Shane Drift said in a statement Wednesday.

“We know we have been through difficult times in the past, and together, we will get through this next period stronger and more vibrant as we continue to live Mino-Bimaadiziwin” — which means “living the good life” in Ojibwe — the Leech Lake Band of Ojibwe said in a statement.

In Red Lake, tribal leaders were gathered Wednesday for a special meeting to discuss the funding freeze when news broke that it was rescinded. Red Lake District Rep. Thomas Barrett said in a Facebook post that “the Trump administration has exposed themselves and their intentions. We must remain vigilant.”

Susan Du, Janet Moore, Walker Orenstein, Kim Hyatt and Jana Hollingsworth of the Minnesota Star Tribune contributed to this story.