Trump attempts to freeze federal grants. What it means for Michigan

• Michigan leaders assessing Trump administration order freezing federal grants, which was delayed by federal court
• Potential impact on Michigan is unclear, but the state gets billions in annual funding from federal government
• Trump attempting to block additional spending under climate law that has funded more than 60 Michigan programs

A pause in grants by the administration of Donald Trump —  expected to be temporary but of undetermined duration — sent Michigan leaders scrambling Tuesday as they assessed the impact in a state that annually gets billions in federal assistance.

They’ll have more time to complete that assessment, however: A federal judge on Tuesday evening ordered a temporary halt to the Trump directive until Feb. 3 as arguments in a related lawsuit continue. 

If the proposed federal grant freeze survives the court challenge, it could affect money that pours in regularly to state and local governments, as well as nonprofit organizations around the state. But the extent of the impact was unclear, both in Lansing and Washington.

While the Trump administration attempted to walk back initial characterizations of a near complete shutoff of federal funds, there was confusion and concern about what programs could be affected long-term, and when other programs would begin to get federal funds again.

Here’s what we know so far:

Social Security checks are safe

In statements Tuesday, the Trump administration said that payments to individuals — such as Social Security, SNAP (formerly known as food stamps) Medicare and college student financial aid including Pell Grants — would not be affected by the funding pause.

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Medicaid payments were less clear. There were reports that the online system used by states to access Medicaid funds had been shut down Tuesday. The system was down for Michigan part of Tuesday.

White House Press Secretary Karoline Leavitt said the administration was aware of the Medicaid portal outage but said no payments were affected. "They are still being processed and sent," she wrote on social media Tuesday afternoon.

Why is this happening?

Trump officials said the pause is meant to assure that federal spending aligns with the priorities and the spate of executive orders the president has signed since taking office Jan. 20, including his attempt to block additional spending under a climate action law that has so far funded more than 60 projects in Michigan.

“It is the responsibility of this president and this administration to be good stewards of taxpayer dollars,” Leavitt said Tuesday. “What does this pause mean? It means no more funding for illegal DEI programs. It means no new funding for the green new scam. It means no more funding for transgenderism and wokeness across our federal bureaucracy.”

So what programs are affected?

Nobody knows. It was unknown whether the pause would stall federal funding for school programs, Meals on Wheels programs for seniors, and grants to colleges and universities.

What’s the worst-case scenario?

The state received nearly $33 billion in federal funding in the fiscal year 2024. Michigan counties received $131 million. The total received directly from the federal government by Michigan nonprofits was unclear.

How long will this go on?

Trump officials characterized the pause as “temporary,” but they did not offer specifics on how long it may last.

Bad timing for the state

Gov. Gretchen Whitmer's administration is currently finalizing its annual state budget recommendation, which is typically delivered to lawmakers in early February. Because much of the state's annual budget is backed by federal funding — including Medicaid, school programs and food stamps for needy families — any major disruptions in federal disbursements could radically alter those plans. 

What’s the real-life impact?

Michigan’s new US Sen. Elissa Slotkin said in a statement that her office is being “flooded” with calls from Michigan officials chronicling the impact of Tuesday’s funding pause along with other funding stops sparked by executive orders.

“My office is being inundated with questions from local mayors of both parties, universities, veteran care and nursing homes, people who have had cancer trials stopped, child care centers, farmer programs, Army contracts – all fearful that they will need to take drastic action to end programs and grants,” Slotkin wrote.

State officials respond

While a nonprofit association beat her to court, Michigan Attorney General Dana Nessel and colleagues from 21 other states on Tuesday evening sued the Trump administration over the federal grant freeze.

In a statement, Nessel said her office was “learning already of services impacted throughout the state, including Medicaid and Head Start. We are receiving reports of critical impacts to significant programs many millions of Michiganders rely upon daily for vital services.”

Elsewhere, the Michigan State Housing Development Authority announced it was putting a new single-family mortgage pilot program "on hold" amid uncertainty over the potential federal grant freeze. 

"Our agency is part of state government and has not been directly asked by the federal government to do anything as part of this directive," the department said in a Tuesday email. "But we do receive federal funding for some programs, and the federal government contributes to some housing projects that we help finance."

The Michigan Department of Education, meanwhile, sent a memo to local school districts saying that it was working with Whitmer and Nessel "on the protection of federal funds for Michigan's students and school staff members."

— Bridge reporters Lauren Gibbons and Mike Wilkinson contributed