Organizations that receive federal funding took a proverbial sigh of relief Wednesday as the Trump administration rescinded its massive funding freeze.
On Monday, emergency meetings across San Antonio and the nation were called as word spread about the Trump administration’s freeze on federal grants and loans. Several online accounting portals that agencies and nonprofits use to collect federal funding were shut down and technical assistance programs were halted.
By Tuesday afternoon, a U.S. judge temporarily paused the freeze until a hearing in federal court on Feb. 3 in Washington, D.C. By Wednesday afternoon, however, the White House Office of Management and Budget (OMB) rescinded the freeze with a short memo from acting director Matthew Vaeth, according to ABC News.
“OMB memorandum M-25-13 is rescinded,” Vaeth wrote. “If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”
The freeze’s recall “signals a critical shift that nonprofits must closely monitor,” Scott McAninch, president and CEO of the local Nonprofit Council said in a statement Wednesday. “As these changes unfold, it’s vital for nonprofit organizations to stay vigilant and informed, as adjustments to federal grant policies can directly impact funding and the sustainability of programs that serve our local communities in South Texas.”
The White House Office of Management and Budget (OMB) had ordered all federal agencies to pause grants in order to “review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities,” Vaeth wrote in his Monday memo to all department and agency heads.
In response, the City of San Antonio decided to carry on, at least for now.
“The implementation details are not clear,” City Manager Erik Walsh said in an emailed statement. “In short, we do not know which or to what extent City departments and programs may be impacted, until we receive further guidance.”
The city’s fiscal year 2025 budget includes about $325.5 million in federal funds for operating programs and capital projects from affordable housing initiatives to airport construction, Walsh noted. “We will continue to focus on delivering City services while we monitor the situation to better understand the implementation scope, timing and potential impact.”
Other agencies, especially those that conflict with President Donald Trump’s myriad of executive orders, may see funding cut off if or when the order goes into effect. It was originally slated to take effect today at 5 p.m.
While the Monday memo and subsequent clarification sent out by OMB states the funding freeze “does not include assistance provided directly to individuals,” some nonprofits had already experienced interruptions, said McAninch on Tuesday.
Medicaid and Head Start centers have been locked out of federal funding websites, McAninch noted.
“A [funding] pause, no matter how many days or weeks, will have a severe impact on the operations of nonprofits,” he said. “It’s hurting the people who are being served in our community. That’s the bottom line.”
The funding freeze almost immediately drew several lawsuits, including one from national groups: The National Council of Nonprofits, the American Public Health Association, Main Street Alliance and SAGE, a national nonprofit that advocates for LGBTQ+ elders.
“It’s just a moving target,” McAninch said. “We just want our nonprofits to know we’re watching it, and … will be any kind of voice that we can be.”
If the uncertainty continues, the funding freeze is sure to be a main topic of conversation as the Greater Chamber of San Antonio brings a local delegation of leaders to D.C. in March, he noted.
“The only certainties to emerge from the administration’s pause on federal financial assistance are chaos and fear, and if that’s the actual goal – mission accomplished,” Mayor Ron Nirenberg said in a text.
“These funds were approved by Congress and are our tax dollars that San Antonio residents sent to Washington,” he wrote. “We will be closely monitoring the situation and will keep the public updated on impacts to the city.”
