Hours after Republican President Donald Trump’s administration announced it was freezing potentially trillions of dollars in federal grants and other fiscal aid across the nation, Illinois government, social service agencies, nonprofits and universities were thrown into confusion and discord as Democratic leaders vowed to fight a move they viewed as unconstitutional.
Among the most immediate impacts was the Medicaid system, a state and federally funded health insurance program for people with low incomes and disabilities. Illinois state agencies reported early Tuesday that even before the federal pause was supposed to go into effect at 4 p.m. Tuesday, state employees were unable to access Medicaid payment systems, a top spokesman for Gov. JB Pritzker said in a statement.
Illinois Attorney General Kwame Raoul, meanwhile, announced his office had joined five other state attorneys general to discuss their intention to sue the Trump administration by seeking a court order to immediately stop the enforcement of the freeze policy. New York Attorney General Letitia James said at least 20 states had been frozen out of their Medicaid reimbursement systems.
Raoul said “this unconstitutional pause in funding will have a devastating impact on the public safety, prosperity and quality of life” of the public. He said the move could not only impact Medicaid recipients but that the policy could adversely affect farmers, research projects at state universities, war veterans and state and local law enforcement’s ability to go after child predators and other criminals.
Democratic U.S. Sen. Tammy Duckworth said the federal pause could also hurt funding for hospitals, child care and disaster relief, while U.S. Sen. Dick Durbin said Head Start and food assistance programs, as well as food inspections, could also be at risk.
The White House’s budget office said in a memo earlier that the pause would not affect Medicare and Social Security programs. But the guidance was less clear about Medicaid, and in Illinois state agencies reported “issues with accessing federal funding sites and disbursement systems, including Medicaid systems,” Tuesday morning, said Pritzker spokesman Matt Hill.
A notice at the top of the federal Medicaid Payment Management System website on Tuesday read: “Due to Executive Orders regarding potentially unallowable grant payments, PMS is taking additional measures to process payments. Reviews of applicable programs and payments will result in delays and/or rejections of payments.”
About 3.4 million people in Illinois were on Medicaid during the fiscal year that ended June 30.
Illinois Comptroller Susana Mendoza on Tuesday said the state was up to date on Medicaid bills and “received our federal match yesterday before the administration shut down our access to the Medicaid system.”
In the fiscal year ending in 2024, Illinois agencies received nearly $30 billion in direct federal aid, according to a report from the state Commission on Government Forecasting and Accountability. More than $19 billion in federal funding went to the Department of Healthcare and Family Services in Medicaid-related payments, according to CGFA.
Billions went to grants in other parts of state government, including some $2.3 billion to the Department of Transportation, $401 million to the agency tasked with economic opportunity and $314 million to the Environmental Protection Agency, the same report said.
“Democrats and Republicans alike will be negatively impacted by this pause in funding,” Raoul said. “On January 20, our nation had a peaceful transfer of power. But let’s be clear, January 20 was an inauguration, not a coronation. Congress is given the power to appropriate the funding. The Executive Branch cannot unilaterally disregard those appropriations passed by a separate and equal House of government. We will collectively fight this unconstitutional mandate.”
Chicago Mayor Brandon Johnson sought to tamp down concerns over the late-night order but could not provide details on how Chicago’s budget would be affected.
At a City Hall news conference, the mayor shot down the legal standing of the Trump memo issued Monday evening by the White House’s budget office. But he and his budget director declined to state how much of Chicago’s approximately $4 billion in grant funding could be jeopardized, or whether the memo could eliminate federal funding for the Red Line extension.
Johnson’s $17.1 billion budget for this year counts on $2.7 billion in federal grants this year, according to records in the city’s publicly accessible computer portal.
“This is something that is well outside the purview of the executive office,” said the mayor, who noted he spoke with Duckworth and U.S. Sen. Dick Durbin on Tuesday morning.
“These appropriations have been mandated by the legislative branch,” Johnson said. “These are laws.”
Pritzker also was in touch with local and federal officials, other governors and non-government organizations about the memo, Hill said. The governor’s office has been directed to “assess the detrimental impacts of this unlawful action,” he said.
Johnson’s budget director, Annette Guzman, said her office is conducting an analysis on the impact of the freeze but she did not elaborate on the scope, saying “further digging” is needed.
“It all comes under the framework of understanding the legality of the orders to begin with … whether or not these (executive orders) have the authority over congressional spending,” Guzman said.
Among the biggest projects needing federal funding is the long-planned extension of the Red Line south to 130th Street. But it wasn’t immediately clear if or how the federal grant pause might affect the extension, as well as other transportation projects.
The agency signed an agreement locking in a federal grant days before Trump took office, and officials said Tuesday morning they continued to view the agreement as binding.
“The Red Line Extension Project’s funding grant agreement that the CTA and FTA (Federal Transit Administration) executed this, like similar grant agreements that the CTA secured for projects such as the Red Purple Modernization Program, is a binding and legal commitment by the federal government to provide the committed and obligated funds,” spokeswoman Tammy Chase said in an email. “As a result, we do not interpret any recent activity to have any impact on the federal government’s commitment to fund this essential transit project.”
The CTA, like other transportation agencies, also relies on federal funding for a variety of other construction projects. Chase said the agency’s law department was reviewing the latest federal directive “as it relates to future federal funds for CTA beyond funding grant agreements already in place.”
The Chicago Housing Authority is also analyzing the directive and its impact on the agency, a spokesperson said.
Universities known for their research are also facing uncertainty. University of Chicago Provost Katherine Baicker sent a message to university employees Tuesday morning asking researchers working under federal grants to temporarily stop spending money on non-personnel expenses, such as supplies, equipment and travel. She also asked them not to start any new experiments.
“This is not a request that I make lightly,” she wrote. “The research enterprise is at the core of our University’s mission and is of profound importance to the daily work of our faculty, researchers, staff, and students.
“I also know that this is insufficient guidance and that you must have many questions (as do I),” Baicker wrote. “I wish that I had more information to share now, but will continue to be in touch as we learn more. But we must for now proceed under the assumption that grant expenditures incurred after today while this memorandum is in effect may not be covered by federal funding.”
The freeze in funding could also affect many Chicago area federally qualified health centers, which are community health centers that receive federal dollars to help care for patients with low incomes.
Erie Family Health Centers, which has 13 locations in Chicago, was still trying to make sense of the rapidly changing news Tuesday afternoon, said spokesperson Kate Birdwell, in an email. She noted that it wasn’t yet clear what the federal funding freeze meant for health centers like Erie or which federal grants might be on pause.
She said Erie is in “a strong financial position and stable for now,” but “any long-term pause to federal grant funding or Medicaid support would be devastating to Erie and other community health centers.”
Tribune reporters Lizzie Kane and A.D. Quig contributed.
Illinois Democrats vow to fight President Donald Trump’s freeze of federal grants and loans, calling it unconstitutional.
Mayor Brandon Johnson on Tuesday sought to tamp down concerns over the late-night order from President Donald Trump’s administration to freeze federal funding but could not provide details on how Chicago’s budget would be impacted.
At a City Hall news conference, the mayor shot down the legal standing of the memo issued Monday evening by the White House’s budget office. But he and his budget director declined to state how much of Chicago’s approximately $4 billion in grant funding could be jeopardized, or whether the memo could eliminate federal funding for the Red Line extension.
“This is something that is well outside the purview of the executive office,” said the mayor, who noted he spoke with Illinois Sens. Dick Durbin and Tammy Duckworth on Tuesday morning. “These appropriations have been mandated by the administrative branch. These are laws.”
Johnson’s budget director, Annette Guzman, said her office is conducting analysis on the impact but did not elaborate on the scope, saying “further digging” is needed.
“It all comes under the framework of understanding the legality of the orders to begin with,” Guzman said. “It’s the same kind of concept that we’re looking into, as to whether or not these (executive orders) have the authority over Congressional spending.”
The mayor and his team also sidestepped a question on whether he will appear before Congress in response to an invitation from GOP Rep. James Comer, R-Tenn., to testify in the Oversight Committee on sanctuary city policies.
His corporation counsel, Mary Richardson-Lowry, said “I respectfully disagree” with Comer’s letter but said it was “premature” to comment on his invitation until her office’s legal review was concluded.
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