Trump’s order to freeze federal grants sparks chaos in Berkeley

Government agencies in Berkeley and around the Bay Area spent much of Tuesday scrambling to understand the Trump administration’s order to freeze a wide array of federal spending programs, but most could not immediately ascertain how it would impact the bottom line.

The agencies got a temporary reprieve, however, after Judge Loren L. AliKhan of the District Court in the District of Columbia temporarily blocked the order that was handed down Monday night by the Office of Management and Budget. Her ruling came moments before the freeze was to take effect at 5 p.m. Eastern time. It lasts until Monday. 

Judge AliKhan ruled on a motion filed by the National Council of Nonprofits, the American Public Health Association, the Main Street Alliance and SAGE. The state of California, along with New York and 22 other states, also filed a lawsuit to stop the directive, which would have stopped the flow of $3 trillion in federal assistance. 

“The Trump Administration is recklessly disregarding the health, wellbeing, and public safety of the people it is supposed to serve,” said Attorney General Rob Bonta in a statement announcing the lawsuit. “This directive is unprecedented in scope and would be devastating if implemented. Already, it has created chaos and confusion among our residents.”

Local leaders don’t have many answers

Berkeleyside called numerous institutions that get federal funding and none had yet figured out what the OMB order meant. 

“Just like many others, we are seeing a rapid flow of information and it’s unclear at this point where it will all settle,” Matthai Chakko, a spokesman for the city of Berkeley, said in an email. “At this stage, we are gathering information to better understand the potential impact of the announcement.”

The University of California system, which receives tens of billions of dollars in federal funding each year for research, patient care, and support for the national labs it runs, is talking to key policymakers and those in federal agencies to determine what the memo means. 

“During such challenging times, we remain committed to our students, staff, faculty, patients, and one another,” UC President Michael Drake said in a statement. This is an uncertain time for many and while we don’t yet know what lies ahead, we remain steadfast in our values, our mission, and our commitment to caring for and supporting our entire community.”

Federal Pell Grants, which provide financial assistance to 34% of students in the UC system, or more than 75,000 people, are not affected by the OMB’s orders. 

UC Berkeley gets about $1 billion in grants annually from the federal government, according to Dan Mogulof, a UC Berkeley spokesman. The Lawrence Berkeley National Laboratory gets about $1.5 billion a year from the federal government. 

The majority of Berkeley’s budget is funded locally through property, transfer and special taxes. The police and fire budgets come out of Berkeley’s General Fund, which does not get federal money.

However, federal dollars do flow to health and homeless services, according to Sophie Hahn, a former council member. 

​​ “A lot of health and human services money comes through the federal government,” Hahn said. “My sense is the people who will be hit first are the most vulnerable.”

Berkeley also receives one-time federal grants. For example, in 2024, the Department of Energy awarded Berkeley $5.7 million over nine years to upgrade the energy efficiency of buildings.  

“It’s not clear whether halting means that the funds that have been allocated and received are impacted or it means they will be impacted next year,” said Hahn. 

The Berkeley Unified School District received $4.9 million in federal funds in the 2024-25 school year, about 2% of its budget. The district is closely monitoring the situation and is examining the clarifications as they are issued, spokesperson Trish McDermott said.

The federal government heavily funds Bay Area transportation projects and the Metropolitan Transportation Commission is trying to determine if the OMB directive will impact it. 

“Have we taken a look — yes,” said John Goodwin, a MTC spokesman. “Have we taken a second look? Many looks have been taken. It’s going to be a little while before we and our partner agencies can make sense of this.”

The Alameda County Board of Supervisors held a lengthy discussion Tuesday morning with its federal lobbyists about the implications of the OMB memo. The lobbyists said it will take months to get a firm idea of what potential cuts are actually coming down the pike. But they also encouraged organizations, if they’re still able, to log into their federal portals to draw down whatever funds they can before the end of the day. 

Jane Garcia, the CEO of La Clínica de La Raza, an Oakland-based healthcare provider to low-income people and the uninsured, told the board that the portal for accessing her organization’s existing federal grant was not currently accessible. La Clínica served over 81,500 patients, according to its 2023 annual report. 

“I don’t know if it’s just flooded with attempts or if they purposely closed it,” Garcia said. “But I wanted you to know that is not an option at this time.” 

Numerous organizations that rely on federal dollars for health services were unable Tuesday to access the online system where they get their funds, according to various press reports. The U.S. Department of Health and Human Services’ website notes that due to Trump’s executive orders, the Payment Management Services portal is taking additional measures to process payments, which will result in delays and/or rejections of payments. 

Todd Benson, executive director for Faith in Action East Bay, noted that the county’s Welcome Corps, a private program that helps resettle refugees in the U.S., has been suspended. Supervisor Nate Miley said there are refugees living in Alameda County who now can’t be connected with federally funded social services. The board will consider authorizing $800,000 to help cover these expenses. 

Even top state officials remain unsure how this would affect Californians.

“We’re currently reviewing the OMB memo and working with our federal counterparts to get clarity,” said H.D. Palmer, a spokesperson for the state’s Department of Finance. “While this is clearly a fluid situation, we remain confident in our ability to continue serving Californians.”

That same statement — word for word — was issued by the spokespeople from California’s housing, health care services, workforce development, economic development and social services departments.

A spokesperson for Gov. Gavin Newsom wrote in an email, “This memo violates federal law. We are confident funding will be restored.” 

Senate Democrats echo Newsom, saying the 1974 Impoundment Control Act prohibits Trump from blocking funding Congress already agreed to.

Congresswoman Lateefah Simon called Trump’s order “unconstitutional and abominable” on X Tuesday. “This means stopping public programs millions rely on and support for disaster relief, small businesses, education, transportation, and more,” Simon wrote.

How the confusion unfolded nationally

The chaos began Monday evening when, in a two-page memo, the president’s acting director of the Office of Management and Budget ordered federal agencies to “temporarily pause” all financial assistance that could be “implicated” by any of the president’s prior executive orders. Since taking office just more than a week ago, President Donald Trump has issued a flurry of edicts to remake federal policy and governance.

The White House held a press briefing on Tuesday to emphasize that this was simply a temporary pause on spending and that individual financial assistance programs like Social Security, Medicare, food stamps, Pell Grants and rental assistance would not be affected by the order. 

Karoline Leavitt, the White House Press Secretary, said at the briefing — her first — that these were “very responsible measures” meant to counteract how “Biden spent money like drunken soldiers.” The pause on federal funding is meant to ensure that taxpayer dollars are not spent on DEI programs, the “Green New Scam,” transgenderism and wokeism across government,” she said.

California’s Medi-Cal portal crashed on Tuesday, as did Medicaid sites in many states. The White House insisted the stoppage was not intentional but coincidental. 

Before the judge intervened, the administration sent a follow-up memo to all federal agencies with a list of more than 3,200 federal spending programs. Agency staff were asked to provide the White House with budgetary details about each program and answer a series of questions, including whether the program might support undocumented immigrants, impose an “undue burden” on domestic energy exploration or promote “diversity, equity and inclusion” efforts, abortion or “gender ideology.”

Programs listed include those that provide aid for disaster victims, housing for low-income residents and farm workers, foreign aid, air and water pollution monitoring and early childhood education.

Eli Wolfe and Natalie Orenstein with our sister news site The Oaklandside and Ben Christopher with CalMatters contributed reporting to this story. ​​Berkeleyside is a media partner of CalMatters, a nonpartisan, nonprofit news site covering the state Capitol and issues related to public policy in California. Berkeleyside occasionally republishes CalMatters stories we believe will be of interest to our readers.