Bay Area universities, nonprofits and local governments are scrambling to understand how the Trump administration’s federal funding freeze could impact everything from money for education and low-income housing subsidies to environmental research and wildfire recovery.
The sweeping order to immediately halt trillions of dollars in funding aims to align federal spending with President Donald Trump’s priorities, including “ending wokeness and the weaponization of the government.” It directed all federal agencies to pause disbursing grants and loans until the new administration determines which spending should be allowed to go through.
On Tuesday, a federal judge in the District of Columbia temporarily suspended the funding freeze. Judge Loren AliKhan said she would render a new decision on Monday.
Bay Area officials assailed the administration’s move as an unlawful power grab. They vowed to push back on Trump’s promises to dramatically shrink the federal government.
“Sensible budget-cutting requires discernment, not disregard for human suffering from halting essential public safety, health care or disaster relief,” said U.S. Rep. Sam Liccardo, a Democrat from San Jose, in a statement.
Here’s what we know — and don’t know — about how the changes might affect the Bay Area.
Q: Is this really a big deal in the Bay Area? How much federal funding flows through here?
A: According to data from USASpending, the official source for data on government spending, companies and agencies in the nine-county region were expected to get a whopping $27 billion in federal assistance this fiscal year.
Of that, $15.4 billion has already been allocated, and another $11.6 billion has yet to be paid out. Some of that may be stalled or disappear entirely.
Q: What sorts of Bay Area agencies or projects stand to be affected?
A: The biggest Bay Area recipients of federal cash include the California Public Utilities Commission, The University of California Regents, Stanford University, The Port of Oakland, the City and County of San Francisco, and San Francisco State University, each with over $200 million expected from the federal government this year.
Local counties, governments, agencies and companies located in Alameda County — from Kaiser to biotech companies to the UC system — get the most in federal assistance, which includes contracts, grants and direct payments. Organizations in the county were budgeted to receive $11.3 billion in federal assistance this fiscal year.
That’s more than twice what San Francisco-based entities were expecting this year – $5.4 billion – followed by Santa Clara County, with $4.5 billion in contracts and grants, some of which now appear to be on the chopping block.
Q: When will we know what’s getting cut and when will the cuts take effect?
A: The short answer: it’s unclear what federal spending could ultimately be slashed or when. However, the Office of Management and Budget (OMB) ordered all federal agencies to submit detailed information on their grant or loan programs no later than Feb. 10.
According to an OMB memo to federal agencies, officials plan to scrutinize grant programs that range from dairy subsidies and mortgage assistance to crime lab funding and meteorological research.
Q: Do we know how this will affect local governments?
A: In Santa Clara County, several departments had been locked out of federal payment portals, County Executive James Williams said during a Board of Supervisors meeting Tuesday. Several service providers that contract with the county also received notices from the federal government to cease any further activity. Williams said many were programs delivering social services – including a refugee assistance program.
Williams, who described Trump’s order as “patently unconstitutional,” has directed agencies across the county to continue with business as usual.
“Everyone in the country needs to recognize what we are talking about here, which is an absolute extraordinary exertion of executive authority to dictate and control federal spending and is something that should gravely concern all Americans,” Williams told the board.
Should the freeze extend several weeks, there could be “significant impacts” on the county’s ability to provide services, he said.
Q: What does this mean for Bay Area universities?
A: The U.S. Department of Education said Tuesday that the funding pause does not apply to student financial aid, including federal Pell grants or direct loans.
But other federal grant programs that provide funding to minority-serving institutions and historically Black colleges and universities would likely be impacted, as well as grant programs that provide financial assistance to underserved students, such as the College Assistance Migrant Program, which helps students who are the children of migratory or seasonal farmworkers – or are themselves seasonal farmworkers – attend college.
A freeze would directly impact university research. Jon Fansmith, of the nonprofit American Council on Education, said institutions and researchers would not be able to apply for federal monies and no funding decisions will be made for any grants that were in the process of being awarded. Researchers or schools that had been awarded grants but had not yet received them also appear to be on hold.
UC — which received more than $7 billion in research awards last year – and California State University said Tuesday that system leaders were working to understand the details of the executive order and its potential impact on students, faculty and staff.
“I am very concerned. We have outstanding young faculty here and they need their grants renewed,” said Nobel Laureate Randy Schekman, a UC Berkeley professor of molecular and cell biology who is protected from a federal funding freeze because his work is privately supported.
“Some of them will be in peril, and we’ll just have to shut the lab. Scientists may become discouraged and change careers, if they can’t get funded,” he said. “Those who have options outside of the country may return to their homes –particularly scholars who have quite generous possibilities back in mainland China.”
Q: Any K-12 impact?
A: Grants assisting underserved and disadvantaged student populations, including minority students, English language learners and homeless students, were included in the freeze announcement, as well as grants providing financial assistance to rural districts, art education programs and projects aimed at improving American history and civics education in schools.
While officials clarified Tuesday that a freeze would not impact federal funding for special education or financial aid for schools with low-income students, education leaders were still unsure if it would impact school nutrition programs and early childhood education – like Head Start, a federally funded program that helps low-income children under the age of 5. OMB said Head Start funds would not be paused, but staff were locked out Tuesday from accessing funding through payment websites.
“Now is the time to invest in more resources for public education and vital public services, not violate the U.S. Constitution to slash food and medical care for our children, families and most vulnerable,” said David Goldberg, president of the California Teachers Association.
Q: Any housing impact?
A: Across the Bay Area, homeowners and renters rely on a range of federal programs and subsidies to help shoulder the burden of the region’s high housing costs. On Tuesday afternoon, federal officials clarified that direct payments to households, including rental assistance, also known as Section 8 housing vouchers, would not be affected by a funding freeze.
Nonprofits continue to worry that money for other efforts to help people pay rent or cover other necessities could be on the chopping block.
“It doesn’t completely alleviate our concerns because a lot of those cash programs are paid through grants to nonprofits,” said Kyra Kazantzis, chief executive at Silicon Valley Council of Nonprofits.
The federal government also plays a key role in building affordable housing by offering tax breaks and grants that developers combine with private financing and state and local subsidies. It’s not clear to what extent those programs could be affected.
Q: Is California doing anything to try to prevent a funding freeze?
A: On Tuesday, California Attorney General Rob Bonta and 22 other state attorneys general sued to stop the funding freeze from taking effect. They argued their states stand to lose billions of dollars in funding for programs to protect the health and safety of the residents, including disaster-relief funding necessary for Los Angeles’ wildfire recovery.
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Q: What else should we know?
A: In the lawsuit filed by Bonta and other attorneys general, state leaders contended that the funding pause directly violates the U.S. Constitution and a federal law passed in 1974 – the Impoundment Control Act – which reasserts Congress’ control over the nation’s purse strings. Democratic leaders said the funding freeze fundamentally violates the nation’s separation of powers between Congress and the Executive Branch.
OMB said Tuesday the funding pause is not an impoundment, but a temporary pause to give agencies time to ensure programs are spending funds in accordance with Trump’s policies.
“My guess is they are hoping to get it to the Supreme Court,” said Jack Pitney, political science professor at Claremont McKenna College, “and they’re betting on a decision that will vastly expand executive power.”
