Trump’s federal grant freeze triggers lawsuit, panic among agencies in Nevada, elsewhere

The White House’s mandate to freeze federal spending on loans and grants that are a financial lifeline for schools, government departments and nonprofits partially went into effect Tuesday, spurring panic among agencies across Nevada reliant on those monies.

The demand launched a series of legal actions, including a federal judge in Washington blocking parts of the order moments before it was to go into effect. U.S. District Judge Loren AliKhan’s ruling would keep some awards already granted by the federal government flowing at least until she hears more arguments Monday.

Nevada Attorney General Aaron Ford, a Democrat, joined a coalition of attorneys general from 22 states and the District of Columbia in a lawsuit to stop implementation of President Donald Trump’s executive order, which was issued late Monday.

More than $9.1 billion of Nevada’s revenue was derived from federal funds in fiscal year 2022, higher than the national average, according to a Pew analysis of data from the U.S. Census Bureau and National Bureau of Economic Research.

The temporary pause on assistance comes with demands from Trump’s administration for “comprehensive analysis” of how assistance is utilized as it eyes cracking down on “wokeness.”

“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 Matthew Vaeth, acting director of the Office of Management and Budget, in a memo to affected parties.

Administration officials have said federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.

Nevertheless, the order has agencies that receive federal funds to operate in Nevada scrambling to understand what the future for their programs might look like, with some health and education services potentially on the chopping block.

Nevada Health Centers, a private nonprofit providing health care services to more than 50,000 people in the state annually, said federal funding for its 330 Grant was paused. Those funds represent about 20% of the organization’s overall operating budget.

“We’re trying to figure out how long the pause will be, what duration, what that means,” said Josh Charlebois, the organization’s director of organizational development before AliKhan’s ruling. Charlebois added there hadn’t been much outreach from concerned patients as of Tuesday afternoon, but “it’s a new day tomorrow; things could change.”

Spokespeople for many agencies that receive federal funds said it’s too early to understand what will be affected by the decree, but educational professionals nationwide have been bracing for hits to their field. The president has identified the sector as a target for him, running on a campaign promise of closing the Department of Education.

The Clark County School District said Tuesday afternoon, before the judge blocked the freeze, that it was working closely with the Nevada Department of Education and awaiting clarity on the order.

“Based on current information, we do not anticipate an immediate interruption to district programs and students’ services,” the district said in a statement. “As we learn more about the impacts of this decision, we will inform our employees, families and the community.”

Some of Nevada’s biggest public higher education institutions have benefited from millions of dollars in federal funds but also have programs supporting DEI and Hispanic populations. In the 2023 fiscal year, UNR received over $22 million and UNLV over $10 million from the National Science Foundation, a federal agency that supports researchers.

Amy Pason, associate professor of communication studies at UNR, said there had been uncertainty among her colleagues on how the institution would be affected. She acknowledged that the order was specific to the Trump administration’s anti-DEI policies, but that is a function “our institutions operate on and are founded in.”

“We accept all students to come to our institutions, international students, those that are documented or not documented on (Deferred Action for Childhood Arrivals), for example,” Pason said. “And so if any of our research or our research teams or the teaching that we do is targeted because of this broad swath ... that inherently will hobble everything that we’re doing on our campuses.”

UNR has applied for Hispanic Serving Institution (HSI) status, which is granted when a higher education institution has total enrollment made up of at least 25% Hispanic undergraduate full-time students. The designation means the institution can compete for certain federal grants.

UNLV already holds HSI status.

“That seems like it’s a pretty obvious thing that would be cut long term if we’re not allowed to think about accessibility and inclusion,” Pason said. “So, that would really harm the funding and the support that comes into our institutions here in Nevada.”

Following the news of the order, Democratic elected officials began to express concerns regarding government overreach and harm to constituents.

As a result, Sen. Catherine Cortez Masto, D-Nev., changed her stance on how she would vote as Senate confirmation hearings continue for Trump appointees. “I was ready to confirm Sean Duffy to lead the Dept. of Transportation, but I cannot vote for him after the chaos Pres. Trump has unleashed his order to pause critical federal funding to Nevada,” Cortez Masto wrote on social media. “The funding being held up by Pres. Trump includes support for Nevada’s seniors, veterans, and families — not to mention grants for job-creating transportation projects statewide.”

Ford, whose office said it was “prepared to fight against this ill-conceived idea,” has already challenged the Trump administration’s executive orders this month. Last week, he joined a multistate lawsuit to challenge Trump’s executive order ending birthright citizenship.

That order was temporarily blocked in a separate lawsuit that made its way to a Ronald Reagan-appointed federal judge in Washington.

“My office has already stepped forward once to fight back against an unconstitutional executive order, and today I have unfortunately had to do so again,” Ford said in a statement Tuesday. “Presidents are elected leaders and the rule of law bounds their actions. President Trump must respect this. When he does not, I’ll defeat him in court.”

Rep. Dina Titus, D-Nev., called the freeze “a cruel manifestation of Project 2025,” which was created as a blueprint for “the next conservative administration.” Trump denied any affiliation with the initiative during last year’s presidential campaign but has since nominated its authors for roles in his administration and heeded its calls through his executive orders.

“This federal funding has been lawfully appropriated by Congress and this chaotic, illegal Trump administration order is another assault on our democracy,” Titus wrote in a statement.

Trump’s pick for running the OMB, Russell Vought, was a Project 2025 contributor and wrote a section about the role the office should play. He wrote that “it has the only statutory tools in the White House that are powerful enough to override implementing agencies’ bureaucracies.”

The concerns didn’t transcend party lines in Nevada. Republican Gov. Joe Lombardo said his office was in communication with the White House and condemned “shameless political theater” surrounding the freeze.

“The Office of the Governor is in communication with the White House and will participate in a larger meeting with the Office of Management and Budget to discuss the potential impacts to state agencies,” Lombardo wrote in a statement.

White House Press Secretary Karoline Leavitt denied any uncertainty in the White House and said “assistance that is going directly to individuals” will not be affected by the pause, citing benefits from Social Security, Medicare, Supplemental Nutrition Assistance Program and welfare.

“However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars,” Leavitt said. “That is something that President Trump campaigned on.”

She added the goal was to ensure federal funding doesn’t conflict with Trump’s recent executive orders, like calling for the end of DEI programs.

Other Nevada agencies that utilize federal funding have been looking into how they might be affected, including the Southern Nevada Regional Housing Authority, Nevada Department of Transportation, Nevada Department of Health and Human Services and longtime Las Vegas nonprofit Opportunity Village.

The memo Vaeth sent Monday said agencies must submit information on programs, projects and activities affected by the pause before Feb. 10.

Ongoing concerns were further driven by outages Tuesday to portals where states submit expenses for Medicaid reimbursements; the White House said there was no correlation to the freeze.

“We have confirmed no payments have been affected — they are still being processed and sent,” Leavitt posted on social media. “We expect the portal will be back online shortly.”