Trump's spending pause creates chaos in Virginia
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The Trump administration's temporary pause of federal grants and financial assistance programs Tuesday threw Virginia budgets, state agencies and hospitals into chaos.
State of play: A federal judge blocked the freeze, minutes before it was set to go into effect, until Monday. But the lack of clarity over how exactly Virginians would be impacted — and for how long — had already created massive confusion as officials scrambled to determine affected programs.
- Federal dollars account for around 40% of the state's non-general fund budget, per The Washington Post.
- Millions go to Richmond and surrounding localities, supporting everything from health care, housing and education to disaster response and highway maintenance.
- Other programs include mental health, substance use and overdose prevention services.
The latest: It wasn't until just before 4pm Tuesday that Gov. Youngkin said, after speaking to White House officials, it wouldn't interrupt disaster recovery efforts, school and child care funding, free school lunches and money for roads.
- He called information to the contrary a "partisan stunt" and "dangerous fearmongering."
- But as of Tuesday afternoon, the Virginia Department of Education told the Times-Dispatch it was awaiting federal guidance.
The big picture: The temporary pause, outlined in a memo from the White House Office of Management and Budget, was designed to give the new administration time to review agency spending.
- Agencies had until Feb. 10 to submit detailed information on any programs, projects or activities subject to the pause, which applies to financial assistance for "DEI, woke gender ideology, and the green new deal," per the memo.
- The memo said the pause "does not include assistance provided directly to individuals" like student loans, financial aid for college, food stamps, Social Security or Medicare.
Yes, but: The Virginia Hospital & Healthcare Association said in a statement Tuesday afternoon that reimbursement for work "performed under federal health care grants has been suspended."
- VHHA, which represents many of the state's hospital systems, said it's unknown whether Medicaid reimbursements for patient care are, too.
- Virginia's Medicaid agency has not responded to Axios about whether its Medicaid payment systems are down, as has been reported in other states.
Zoom in: Democratic Sen. Louise Lucas, one of the most senior legislators in the General Assembly, said she's asked Virginia's Secretary of Finance to share how the pause "impacts our current budget and cash flow."
- Democratic Rep. Jennifer McClellan, who represents Richmond, posted she's been receiving calls from constituents.
- "All of them are confused, fearful for their futures and their livelihoods," McClellan said. "The impact of this absurd move can't be overstated."
- Virginia Democratic Sens. Mark Warner and Tim Kaine called it a "reckless and illegal order" and called on the administration to "reverse course."
The other side: Virginia GOP Rep. Morgan Griffith told the Washington Post "Obviously all of our constituents are concerned … But the Biden administration was shoveling money out the door so fast that there's real questions as to whether they went through the proper protocols on it."
What's next: A Richmond spokesperson said the city is "conducting a comprehensive review" to know how a federal funding pause would affect services.
This is a developing story. Check back for more details.