Trump administration's pause on federal grants could slow projects in New Mexico

WASHINGTON — President Donald Trump’s Office of Management and Budget issued a memo Monday directing agencies to pause federal grants and loans, a sweeping move that could affect millions in federal dollars meant for New Mexico infrastructure, educational institutions and disaster recovery. The memo was supposed to go into effect Tuesday evening, but a federal judge temporarily blocked the freeze until Monday for existing programs.

The memo specifically exempts Medicare and Social Security benefits. The memo also spares assistance received directly by individuals. Much of the federal funding allocated for New Mexico municipalities and nonprofits comes in the form of grants. It is unclear how much of that money will be disrupted. The memo is further indication that the Trump administration is attempting to erode Congress’ traditionally — and constitutionally — held power to dictate federal spending.

“Firefighters, police officers, neighborhood schools, small businesses, veterans — that’s who Trump is hurting with this blatantly illegal act,” Sen. Martin Heinrich, D-N.M., said in a statement. “Trump may think this is a game, but the impact on New Mexicans will be real, and I will not let it stand.”

Billions are at stake for the nation and New Mexico, Sen. Ben Ray Luján, D-N.M., said in a statement.

“This will have a far-reaching impact across New Mexico, reducing health care access for working families, undercutting education programs for children, threatening research at the national labs, rolling back our broadband efforts, holding funding for our specialty crop farmers, pausing VA transportation programs that help veterans get to medical appointments, and making it more difficult for law enforcement to keep our communities safe,” Luján said in a statement.

Federal agencies have been ordered to pause new funding awards, and disbursements under open awards, until the administration determines if the financial assistance conflicts with any of the president’s priorities, as laid out in his flurry of week one executive orders.

“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,” the memo reads.

“I’m glad the Administration is examining the money before it goes out the door,” said Republican Sen. Ted Cruz of Texas.

The directive would impact critical disaster assistance in New Mexico, according to Luján. Ruidoso and Roswell specifically would be impacted by the president’s withdrawal of approved federal funds, a Luján spokesman said. Ruidoso was devastated by wildfires last summer, while Roswell was hit with flooding last year.

But the billions in federal dollars for Calf Canyon/Hermits Peak Fire recovery would likely not be affected because that money is primarily going to individuals, not businesses or municipalities, according to Rep. Teresa Leger Fernández, D-N.M. The recovery money for that fire is also authorized through a different law than other disaster recovery dollars, so it has more protection from efforts to claw it back, Leger Fernández said.

A number of New Mexico agencies and organizations were notified that their funding was suspended Tuesday, said Rep. Melanie Stansbury, D-N.M.

“Federal portals that are used for reimbursement were frozen, including reimbursement for housing programs, reimbursement for Medicaid programs. Since the news broke just a few moments ago that a federal judge has put a stay on the freeze of that funding, those portals have begun to open back up,” Stansbury said during a press call Tuesday afternoon.

Those notices included one to the New Mexico Coalition to End Homelessness, which, like many nonprofits focused on homelessness in the state, relies on Continuum of Care grants from the Department of Housing and Urban Development.

“If this stays, the freezing of this money will have a direct impact on New Mexico,” said Monet Silva, executive director of the coalition. “We are looking at going from people being housed to unhoused almost instantly.”

New Mexico’s congressional delegation touted $17 million in Continuum of Care grant award announcements for the state in January, including more than $3 million for the city of Albuquerque. Mayor Tim Keller said the city will challenge the order and fight for awarded funding.

“Look, this is not a reality show,” said Rep. Gabe Vasquez, D-N.M. “The president needs to understand that he is dealing with the real lives of Americans. And this morning, the first calls that I got were for three projects that are really important to my district.” Those included a road project and affordable housing project in Las Cruces and a food pantry in Hatch, he said.

It is unclear if the order would affect the University of New Mexico, said UNM spokeswoman Cinnamon Blair, but university leadership is analyzing the question. New Mexico Department of Transportation spokesperson Kim Gallegos also said it is still too early to tell the impact.

Gov. Michelle Lujan Grisham is coordinating with the state Attorney General’s Office, state lawmakers, the New Mexico congressional delegation and officials in other states regarding Trump’s executive orders and other actions in recent days, according to her Director of Communications, Michael Coleman.

“Our initial assessment indicates serious constitutional concerns that require immediate attention,” Coleman said in a statement.

Cathy Cook is a news reporter for the Albuquerque Journal. Reach her via email at ccook@abqjournal.com. Journal staff writers Noah Alcala Bach, Nakayla McClelland and Gregory Hasman contributed to this report.