Maryland leaders are scrambling to understand the scope of a sudden freeze in federal funding announced this week by President Donald Trump, a move that could cost the state billions in assistance and upend research industries.
Leaders across the country got a reprieve when U.S. District Judge for the District of Columbia Loren L. AliKhan stepped in and delayed until next week the freeze that was originally scheduled to take effect at 5 p.m. Tuesday.
In the meantime, Gov. Wes Moore (D) said his administration will be working through what the policy could mean for Maryland “both in the short term and the long term.”
“I know the judge just issued a temporary freeze to block the freeze until Monday,” Moore said Tuesday at a gathering with environmental lobbyists in Annapolis, to enthusiastic applause. “And while we will continue to monitor the situation, I want people to know this: This chaos will not go unanswered.”
Maryland Attorney General Anthony Brown said his office had joined 22 other states who sued the Trump administration over the president’s order to pause payments for 90 days in what Moore characterized as an “completely ideological funding freeze.”
The freeze was ordered Monday night by the Office of Management and Budget which said the delay was needed to review payments to make sure they aligned with the Trump agenda, including opposition to diversity, equity and inclusion initiatives, “woke gender ideology” and the greeen new deal. The Monday night memo said payments to individuals would not be affected, specifically naming Medicare and Social Security.
That left a lot of programs the freeze could still apply to, which put state and local officials in a panic.
Follow-up communications from the Trump administrated added to the confusion with contradictory information on which programs were exempt from the funding pause. A second memo that it was not a freeze on “all” federal assistance and certain programs, such as Medicaid and Supplemental Nutrition Assistance Program (SNAP), would “continue without pause.”
“The pause does not apply across-the-board. 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,” the follow-up memo said.
“Any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause,” the memo said.
Despite that reassurance, Maryland Health Secretary Laura Herrera Scott told lawmakers that the state website to receive federal funds for Medicaid reimbursements was not functional as of Tuesday morning — an outage that affected all 50 states, according to news reports. Maryland health officials said they had regained access to the Medicaid payment system as of Tuesday evening, but the website “is not functioning correctly.”
It was unclear Tuesday night if the Medicaid payment outage was related to the freeze, said state Sen. Clarence Lam (D-Anne Arundel and Howard), who had asked Herrera Scott about the outage. But he believes the disruption in the Medicaid payment portal indicates that the “rapidly announced pause wasn’t well thought through.”
Senate Minority Leader Stephen S. Hershey Jr. (R-Upper Shore) said that while he agreed with Trump’s “effort to streamline government and foster private sector growth and … reassess government spending,” the way it was executed seemed “risky,” particularly in a state like Maryland, where the biotech industry uses federal grants to fund new research.
“Maryland boasts the third-largest biotech ecosystem in the country, with many private sector companies conducting groundbreaking research that directly impacts patient health and quality of life,” Hershey said in a written statement. “Cutting the research funding these innovators depend on and use to leverage investments in their companies seems risky. While it may be acceptable to reduce research funding for major universities, it’s crucial to maintain economic support for small businesses driving innovation.”
Condemnation of Trump’s move was swift.
“Make no mistake – this move by the Trump Administration is an illegal abuse of power, violating Congress’s approval of these funds,” said U.S. Sen. Chris Van Hollen (D-Md.) in a statement Tuesday morning. “From supporting our local firefighters and first responders to assisting victims of domestic violence to removing lead in our water and improving the health of the Chesapeake Bay – every day, federal grants provide critical resources to our communities. This action only serves to hurt our communities, and I will fight against it with everything I’ve got.”
U.S. Sen. Angela Alsobrooks (D-Md.) echoed Van Hollen, saying the administration’s proposed freeze “would devastate hardworking Marylanders.”
“Countless have already called my office today afraid of what this means for them, for their kids, for their families,” she said in a prepared statement. “These funds support our local police departments that keep our communities safe, hospitals that keep people alive, food programs like SNAP that feed hungry kids, veterans in need of housing after serving this nation, and more.”
Comptroller Brooke Lierman said in a statement Tuesday evening that the federal government awarded more than $23 billion to the state of Maryland in fiscal 2023, money she said is “essential to our state’s continued economic viability.”
But that threat has been delayed until at least next week, when AliKhan has called for a hearing on efforts to block the freeze.
In the meantime, Moore was leaving the church were Tuesday night’s environmental summit was held and heading to a conference call with county and municipal officials from across the state, along with leaders of the Maryland Association of Counties and the Maryland Municipal League — “both Republicans and Democrats,” he said.
“The answer to instability in Washington is going to be clear and calm and steady leadership of our own,” Moore added.
If the federal funding freeze returns next week, Maryland lawmakers would be back to figuring out how to continue affected programs while also grappling with the state’s current $3 billion budget deficit. As of now, the state has very little room to backfill federal grant funds if the pause continues Monday.
“I’ve said earlier that when the federal government coughs, Maryland gets pneumonia. This is a prime example of that,” Senate President Bill Ferguson (D-Baltimore City) told reporters Tuesday morning. “It seems like a rather draconian approach to governance.”
When asked if the state would have to adjust its budget plan, Ferguson said early conversations about spending have anticipated volatility from the federal government.
“The governor certainly anticipated in his budget that there could be more impacts from the [Trump] administration.” But, he conceded, “I don’t think anybody thought that a 90-day stoppage would be on the table, but here we are…It’s top-to-bottom. It’s school systems, it’s fire departments, it’s police departments.”
By: Bryan P. Sears. Reporter Josh Kurtz contributed to this report.