Federal grants paused: CT readies lawsuit following Trump order

The Trump administration’s directive to pause and review trillions of dollars in federal financial assistance faced immediate resistance from critics in Washington and Connecticut, including the threat of litigation from the state attorney general’s office.

The memo sent to federal agencies late Monday set off a scramble as state agencies in Connecticut and across the country started to assess what effects it could have on critical programs. The White House’s Office of Budget and Management directed a temporary pause by 5 p.m. Tuesday on grants and loans that are used “to advance Marxist equity, transgenderism, and green new deal social engineering policies.”

In that memo, Acting OMB Director Matthew Vaeth argued that Donald Trump’s victory gives his administration a “mandate” to review $3 trillion in federal financial assistance and ensure it complies with the dozens of executive orders signed over the past week.

“In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” the memo said.

The White House’s latest order sparked major confusion and fear across the federal government and for states that rely on federal financial assistance. And members of Congress have disputed the legality of the order, arguing that Trump does not have the authority to stop funds from going out that have been approved by Congress.

That has also prompted Connecticut Attorney General William Tong and other state attorneys general to threaten legal action against the Trump administration.

“This is a full assault on Connecticut families — an unprecedented and blatantly lawless and unconstitutional attack on every corner and level of our government and economy. Attorneys general across the country are preparing imminent legal action to protect our states,” Tong said in a statement Tuesday.

“Connecticut and my team are front and center in this fight and will provide updates in real time to Connecticut as this unfolds,” he continued. “Today is not a day for politics — everyone irrespective of party should be standing with Connecticut against this devastating attack on our state.”

The scope and potential consequences of the directive remained unclear on Tuesday morning. The memo noted that it would not affect Social Security and Medicare benefits or assistance “provided directly to individuals.” Officials across Connecticut are still trying to determine what this could mean for specific state departments.

“The Lamont administration is deeply concerned about the federal government’s recent plan to freeze spending on grants and loans. We are closely monitoring this development, analyzing the impact, and remain in close contact with federal partners and our congressional delegation as we develop ways to protect these critical programs,” Office of Policy and Management spokesman Chris Collibee said in a statement. “We plan to share more details and can assure Connecticut that the Lamont administration will do everything we can to ensure residents have access to food, housing, education, and other vital supports.”

Other agencies across Connecticut were directed to provide the same statement when asked about how the freeze could specifically affect their programs.

Still, the memo set off a full-court press Tuesday by Democrats in Washington about potential implications and disruptions if such funding is cut off. Lawmakers, including U.S. Sen. Chris Murphy of Connecticut, ran down a list of programs that could face cuts: Title I funding for schools that help low-income families, cancer research, resources for child care and housing, disaster relief efforts and transportation projects.

“Trump’s actions would wreak havoc … in red and blue communities everywhere,” U.S. Sen. Patty Murray, D-Wash., said at a Tuesday press conference with Senate Democrats. “This is funding that communities are expecting and this memo is creating chaos and confusion about whether these resources will be available to them.”

Depending on the federal funding potentially delayed, Trump might do more harm to his political base than to the rest of the country. Most of the nation’s wealth already is centered on blue states. 

According to a September analysis from Pew Charitable Trusts, states had enough reserves to operate for a median of 48.1 days. And of the 25 states with rainy day funds below the national median, 14 of them voted for Trump last November.

Connecticut has the reserves and strong cash position that would enable it to weather a delay in federal funding transfers longer than many other states. It ranked 17th in the nation last year with enough reserves to operate 60.4 days. And while Connecticut’s budget reserve stood at $3.3 billion during the 2023-24 fiscal year, it currently stands at a record-setting $4.1 billion.

Staff writer Keith Phaneuf contributed to this story.

This story will be updated.