Trump Freeze on Federal Grant Dollars Spurs Worries for Montana Health Services, Head Start Programs and University Research
Funding pause, intended to give agencies time to identify spending banned by new executive orders, was temporarily blocked by a federal judge Tuesday
By MTFP Staff
A national freeze on federal grant dollars ordered by President Donald Trump this week has produced confusion and some alarm from Montana nonprofit service providers, education groups and health care centers. Some said the pause — if enacted in accordance with the apparent scope described in a two-page Monday memo — could jeopardize their ability to keep their programs running in the coming days or weeks.
The freeze was blocked temporarily by a federal judge shortly before it was set to take effect Tuesday evening. The president’s budget office also issued an FAQ sheet Tuesday that appeared to specify the measure wouldn’t apply to some federal programs, pushing back on claims made by grant recipients and Democratic federal lawmakers.
Montana service providers worried by the situation include leaders of Head Start education programs, crime victim services and federally supported health care centers that focus on low-income clients. The office of Montana University System Commissioner Clay Christian also said Tuesday afternoon that while student aid appeared to be exempted from the freeze, hundreds of millions of dollars in university research and development funding could be subject to it.
“The full impact will depend on the length of the pause and further federal clarification on which programs are affected,” MUS Communications Director Leanne Kurtz said in an email. “We are closely monitoring the fast-moving developments.”
Read the Office of Management and Budget memo and see if programs you rely on are affected HERE
Several other state agencies that administer significant federal funding, including the Montana Department of Commerce, the Montana Department of Public Health and Human Services, the Montana Department of Environmental Quality and the Montana Department of Transportation, said in statements to Montana Free Press that they were reviewing the implications of the grant freeze on their programs.
During a virtual town hall Tuesday afternoon, Montana Nonprofit Association Executive Director Adam Jespersen told nearly 400 attendees that while the association does not have all the answers, it would support the organizations potentially affected by the freeze.
“It’s understandable to feel scared, anxious, a sense of whiplash,” Jespersen said. “There are questions around not just the implications for our organization and our sector but our country and the constitutionality of any of this.”
The freeze was described by a Trump administration budget official in the Monday memo as an effort to implement executive orders aimed at reining in spending on foreign aid; electric vehicles; diversity, equity and inclusion efforts and other initiatives advanced by former President Joe Biden. The memo directed federal agency heads to pause “all activities related to obligation or disbursement of all Federal financial assistance” while they review spending to ensure compliance with the president’s directives.
“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,” wrote Office of Management and Budget Acting Director Matthew Vaeth.
National lobbyists for community health centers and other associations distributed a form Tuesday with instructions for grantees to fill it out and return it to the president’s budget office by Feb. 7. The form includes questions about whether grantees use federal funds for undocumented immigrant services, diversity and equity programs, abortion, the suppression of domestic energy initiatives or the promotion of “gender ideology.”
Some Montana nonprofits that draw on pre-awarded federal grant dollars as reimbursement for monthly expenses said Tuesday they had been blocked out of the payment portal they typically use. Todd Wilson, the director of the Helena Indian Alliance, said the hold on grant funds typically available through the federal Indian Health Service would force his organization to use contingency funds until the pause is lifted.
Bridgercare, a Bozeman health care provider that was awarded Montana’s Title X family planning grant in 2022, said federal funds for that program and its Teen Pregnancy Prevention work had been blocked until at least Feb. 10. The organization said it would be falling back on its reserves to cover costs.
“This sowing of chaos and confusion is no way to lead a government,” Executive Director Stephanie McDowell said in a Tuesday statement. “The most important thing for folks to know right now is that Bridgercare and the Montana Family Planning network of sliding fee scale clinics across the state are open and welcoming patients.”
Crime victim service programs also saw disruptions. Kelsen Young, executive director of the Montana Coalition Against Domestic and Sexual Violence, said in a statement that many such programs receive federal funds directly or through the Montana Board of Crime Control. Young said organizations that tried to draw funds to pay expenses found themselves frozen out of the system, not knowing how long the disruption would last.
Alluvion Health, a federally qualified health center system based in Great Falls, said the situation left it uncertain about accessing the grant funds it uses to pay its 160 employees. In addition to Medicaid, Alluvion relies heavily on federal Section 330 funds, which were set up to benefit community health care centers that help underserved populations.
“The 330 grant funds are not discretionary; they are essential for keeping Montana’s healthcare workforce employed,” Preston said.
Montana, as a large, rural state, is heavily reliant on federal spending to operate public programs and services. Federal dollars make up about half of the state’s current two-year operating budget, for example, including $5.1 billion in health and human services funding and $1.4 billion in natural resources and transportation spending.
Kaitlin Price, press secretary for Governor Greg Gianforte, shared a brief statement Tuesday about the impact of the federal funding freeze.
“The governor’s office and state agencies are reviewing the memo,” Price said in an emailed statement.
Montana’s two senior federal delegates, Senator Steve Daines and Representative Ryan Zinke, who serves on the House Appropriations Committee, both said via spokespeople Tuesday that they support what they consider an initiative by the president to cut unnecessary federal spending.
“Senator Daines supports President Trump’s efforts to root out waste, which is the aim of this order,” Daines spokesperson Rachel Dumke said. “He is working to get clarifications on specifics to understand how it will affect Montanans directly.”
Heather Swift, Zinke’s chief of staff, said in a text message that Zinke thinks it is “prudent for the new administration to review the billions of dollars going out the door with little to no oversight that was rubber stamped by the last administration in a last ditch effort to draw down the treasury and cause a default.”
“The president was overwhelmingly elected by Montanans to change the direction of the country and that is exactly what he is doing,” Swift wrote.
Spokespeople for Sen. Tim Sheehy and Rep. Troy Downing provided brief statements applauding what they described as President Trump’s efforts to effectively steward taxpayer dollars. All four members of Montana’s federal delegation are, like President Trump, Republicans.
Several federal delegation spokespeople pointed to the FAQ sheet from the president’s budget office, which states that the grant freeze won’t apply to “Any program that provides direct benefits to individuals.”
The budget office FAQ sheet also explicitly says that Social Security, Medicare, Medicaid and SNAP programs, along with longstanding federal funding for small businesses, farmers, Pell grants, Head Start and rental assistance “will not be paused.”
“[T]he pause does not apply across-the-board,” the FAQ reads. “It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”
Congressional Democrats offered conflicting information Tuesday, saying that the federal Medicaid portals that state agencies use to draw on federal funding were not working.
The director of the state health department, Charlie Brereton, declined to comment on Medicaid payments after a legislative hearing Tuesday. A spokesperson for the department said in an emailed statement Tuesday evening that the Medicaid portal is “operating as normal.”
Earlier in the day, health department staff had expressed uncertainty about the potential pause in communications it sent to groups that receive federal funding. In an email to local Housing and Resource Development Committees obtained by MTFP, Intergovernmental Human Services Bureau Chief Sara Loewen described news of the pause as “concerning for all of us on many levels.”
“We have many, many questions, and no further information as of now,” said Loewen, whose bureau oversees programs including Head Start, Community Development Block Grants and low-income housing vouchers used by HRDCs. “I will get information out to all of you as quickly as possible, but please know that this will be a very fluid time.”
If allowed to take effect despite court challenges filed by nonprofits, state governments and others, the funding freeze could also affect ongoing efforts to implement portions of two major funding bills passed during the Biden presidency: the trillion-dollar Bipartisan Infrastructure Law Congress passed in 2021 and climate change provisions included in the Inflation Reduction Act.
The infrastructure bill incorporated funding for Native American water rights payments, fuel reduction projects geared toward mitigating wildfire risk and investments in large water projects such as a rehabilitation of the St. Mary diversion dam, which thousands of rural Montanans rely on for drinking water and irrigation.
The infrastructure package also funneled $700 million toward a $3.6 billion regional transmission line that Grid United and ALLETE are developing in eastern Montana. The transmission line, which would run east from Colstrip to central North Dakota, would make it easier for grid operators to transfer power between regions and ship power from new generation projects in the area.
The Inflation Reduction Act, which Congress narrowly passed in 2022, has funneled money toward state agencies and private companies alike in the form of grants and tax credits. In July, the U.S. Environmental Protection Agency announced that it was awarding $50 million of Climate Pollution Reduction Grant money to Montana to support forestry- and agriculture-related projects geared toward reducing greenhouse gas emissions. Additionally, the state was expected to develop an inventory of major sources of climate pollution in Montana and develop a “road map” for reducing them.
In Great Falls, Calumet subsidiary Montana Renewables had been poised to receive a $1.4 billion low-interest Inflation Reduction Act loan to upgrade its refinery and increase production of “low emissions transportation fuel.” The company announced Tuesday that it had been informed by the Department of Energy that an initial installment “will undergo a tactical delay to confirm alignment with White House priorities.”
The company had been told the delay would last days or weeks, it said. Calumet projected that the loan would facilitate the hiring of up to 450 construction workers and sustain up to 40 operational jobs.
Missoula Child Start Executive Director Isaac Triance saw a BBC article about the pause memo shortly after he woke up at 6 a.m. Tuesday. For much of the morning, Triance expected he would have to tell the families of 120 children that their childcare program would close on Friday unless something changed.
The federal FAQ sheet’s explicit mention that Head Start wouldn’t be affected was a relief, Triance said in an interview on Tuesday. But he remained concerned about the difficulty of disentangling Head Start’s mission from the sorts of diversity initiatives the Trump administration is now trying to defund.
“Head Start has always had an eye on inclusion and equity,” he said. “We accept kids with disabilities and from varied national backgrounds. There’s a migrant program in Montana that’s about to be started up.”
Missoula’s Child Start is a locally based provider of Head Start services, with its own nonprofit status and 501(c)(3) structure. That means it can seek donations and other non-federal support to continue serving children and families, if necessary.
Its expenses include food purchases for the three meals a day Child Start provides to preschool children, who are in the program based on financial need. The 50-year-old Missoula nonprofit gets its funding through the federal Office of Head Start, which is part of the federal Department of Education.
Statewide, about 4,000 children are enrolled in Montana Head Start, along with about 200 participating classroom teachers, 200 assistant teachers and nearly 5,000 volunteers.
MTFP reporters Mara Silvers, Amanda Eggert, Katie Fairbanks, Matt Hudson and Eric Dietrich contributed to this story, as did MTFP contributor Rob Chaney.
The spending freeze was not only illegal, it caused historic levels of chaos, and was going to cause tremendous suffering for tens of millions of Americans. Including tens of thousands in Montana. And some people would die. Most Americans are, of course, appalled by the freeze, as should be anyone who considers themselves a Christian. Fortunately, it looks like the horrific order will not stand.