Milwaukee Officials Trying To Understand Impact of Trump’s Federal Aid Freeze

Milwaukee City Hall. Photo by Jeramey Jannene.

UPDATE 4:21 p.m.: A federal judge blocked the federal freeze until at least Monday.

At minimum, President Donald Trump is about to demonstrate how wildly interconnected different levels of government and nonprofit organizations are.

Late Monday, the federal Office of Management and Budget froze all grants and loans.

On Tuesday, officials at virtually every level of government were trying to pick up the pieces. Legal action is expected to follow.

The City of Milwaukee relies on “tens of millions of dollars” in federal aid annually said Mayor Cavalier Johnson at a Tuesday afternoon press conference. The funding, allocated through many different programs, provides aid for everything from major road reconstruction to funding officers within the Milwaukee Police Department.

“This is very draconian,” said Congresswoman Gwen Moore (D-Milwaukee). “We can’t pretend that this just has an impact on Democratic cities, this is going to have an impact on farmers, on rural areas and rural hospitals, red, blue or purple, whoever you are, you’re on notice now that the chaos and the suffering across demographics is going to come with this.”

“There are so many questions we don’t have answers to,” said Johnson. “We going to find ourselves in a difficult position if we’re not able to pull these federal resources down.”

Johnson said he is working with department leaders to understand the impact on city operations and when funding could run out. “At the same time, I am working with other local units of government, as well as with organizations that represent municipalities, in order to strategize on how to mitigate the potential impact a funding pause might cause here and elsewhere in our state and in our country,” said the mayor.

“It’s a very concerning day,” said Moore. She said the funding would impact health care providers and those seeking care, schools providing support to low-income students and nonprofit organizations. “I am not sure that [the Office of Management and Budget] has thought this all through.”

The memo says the pause is only to apply to “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” but Johnson and Moore both indicated they are bracing for a wider spread impact.

“I don’t know what it means to be ‘woke,'” said Johnson. “I think it depends on the day and whatever folks that want to use that term feel like when they get out of bed in the morning. I don’t know what that means.”

But he suggested the Trump administration could be coming after electric vehicle charging efforts. The city, in late 2024, won a $15 million grant to build a public-private charging network.

It has also won at least $75 million in other federal grants for street projects that city officials have openly debated whether Trump would sequester. During a December Public Works Committee meeting, administration officials said that if contracts were signed, the money would be issued. But the latest federal action indicates otherwise, at least for now.

Other routine federal grants the City of Milwaukee receives include several awards to the Milwaukee Health Department for lead poisoning prevention and other community health efforts, forgivable loan funding to the Milwaukee Water Works to replace lead service lines and multiple public safety grants to the police and fire departments. A substantial number of state grants are funded with federal dollars.

Earlier Tuesday, Common Council President José G. Pérez and Finance Chair Marina Dimitrijevic sent Budget Director Nik Kovac and Comptroller Bill Christianson a request for an agency-by-agency report on funding timelines and contingency plans.

The federal action is not intended to impact “assistance provided directly to individuals” nor Social Security and Medicare benefits. But in several states, Medicaid website portals used to access benefits were down midday Tuesday, though a White House official pledged they would be reactivated.

“Americans, those who are middle class, don’t realize how much they depend on Medicaid,” said Moore, citing nursing home care as an example.

Moore also said she wasn’t sure things would be as simple as insuring individuals got their direct benefits. “You get your Social Security check, that doesn’t mean you are going to be able to access a ride to dialysis,” said the congresswoman.

Moore said she expects the measure to be challenged in court.

“These are dollars that have been debated, that have passed both the House and the Senate… this is law,” said Moore. “We are seeking solutions and litigation quite frankly because we think this is an overreach.”

Wisconsin Governor Tony Evers is expected to join a multi-state lawsuit challenging the freeze.

Johnson, when asked, didn’t commit to a legal challenge. “We’re trying to get a lay of the land as it is and trying to use the power of the collective in order to push back on this,” said Johnson. “This action has the potential to impact not just urban, blue cities like Milwaukee, but areas that are Republican as well, suburban, rural areas where many Republicans live too. Mayors, in particular and the organizations that we have, have a great platform to make it known that these actions affect everybody, including those folks that voted for and supported Mr. Trump.”

The indefinite pause, according to the memo, is to go into effect at 4 p.m. Tuesday, Jan. 28.

“The use of federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” says the memo from budget office director Matthew Vaeth.