An unprecedented move by President Donald Trump’s new administration to freeze massive amounts of federal funding could have profound and immediate consequences for Colorado.

A two-page memo issued by the Office of Management and Budget on Monday announced the freeze, which appeared to apply to all federal financial assistance, including grants and loans, with the exception of Medicare and Social Security payments. Acting OMB director Matthew Vaeth wrote that the freeze would allow the Trump administration to screen federal aid programs for efforts to “advance Marxist equity, transgenderism, and green new deal social engineering policies.”

A federal judge on Tuesday issued a “brief administrative stay” blocking the order from going into effect while a flood of litigation plays out in court.

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The move could abruptly shut off funding for a vast array of programs administered by state and local governments and nonprofits, though Trump administration officials have offered scant and at times conflicting information about how broadly the freeze will be applied.

Public officials and leaders of community organizations across Colorado were left scrambling Tuesday to process the implications of the order, which — if upheld in court — would amount to a radical rewriting of constitutional precedent giving federal spending power to Congress.

“President Trump’s OMB directive is lawless and unconstitutional — and the freeze in federal funding that he is attempting will have dangerous impacts for millions of Americans,” U.S. Rep. Joe Neguse, a Lafayette Democrat, said in a statement Tuesday. “The order threatens funding for law enforcement grants, farmers, Head Start programs for children, and countless other services and programs that Coloradans rely upon.”

Colorado Attorney General Phil Weiser said Tuesday he would sue to stop the freeze.

“This action takes the power of the purse away from Congress, violates the separation of powers, and is already causing massive harm in Colorado, undermining delivery of healthcare, education, and public safety,” Weiser said. “As attorney general, I will continue to defend Coloradans and the Constitution.”

A separate OMB document “in support of” Vaeth’s memo included a list of more than 2,600 federal programs to be evaluated by the Trump administration as part of the spending freeze. The list included federal food stamps initiatives including the Supplemental Nutrition Assistance Program, or SNAP, and the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC — but White House press secretary Karoline Leavitt insisted Tuesday that programs that provide such aid were not subject to the freeze.

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In a statement, Colorado Governor Jared Polis called the freeze a “senseless action” that should be immediately reversed.

“This indefinite pause in congressionally appropriated federal funding hurts children and hardworking families, jeopardizes American jobs and businesses, harms hospitals and safety net health providers, threatens road and bridge repairs, and impacts countless other programs,” Polis said.

Substantial confusion arose from the White House memo’s declaration that the freeze “does not include assistance provided directly to individuals.” Many federal programs, including Medicaid, food stamps, housing vouchers and energy assistance grants, provide funds to state and local governments that in turn administer payments to individuals. Others provide block grants to nonprofit organizations like Meals on Wheels, which warned Tuesday that the funding freeze could halt meal delivery to millions of American seniors.

U.S. Rep. Gabe Evans, a Fort Lupton Republican, issued a video statement Tuesday defending Trump’s move and criticizing “inflammatory, fear-based language you’re hearing from the left,” even as he acknowledged his office did not yet understand how the freeze would impact Head Start programs, student loans and the Department of Veterans Affairs.

“We’re waiting for more specifics on that,” Evans said, encouraging constituents to contact his office with concerns.

Colorado’s state government alone received more than $17 billion in federal grants and contracts in fiscal year 2024, according to a state transparency database. Roughly $11 billion of that total was made up of Medicaid payments to the state Department of Health Care Policy and Financing.

Of the remaining $6 billion, about $1.8 billion in grants and contracts went to the Department of Higher Education; $1 billion funded child welfare, behavioral health and other programs through the Department of Human Services; $578 million was awarded to a wide variety of programs within the Department of Public Health and Environment; $403 million went to the Department of Early Childhood; and $366 million funded wildfire and other emergency preparedness efforts under the Department of Public Safety.

Medicaid

A footnote to Trump’s OMB memo said it should not be “construed to impact Medicare or Social Security benefits” but did not mention Medicaid, sowing widespread confusion on Tuesday. The Washington Post reported that multiple states were experiencing problems with Medicaid payments, but White House officials again insisted that despite the confusion, Medicaid wasn’t subject to the freeze.

“Our office has heard from Colorado hospitals that the Medicaid payment system has been turned off,” U.S. Sen. John Hickenlooper’s office said. “With Medicaid portals down, doctors and hospitals in Colorado are unable to receive funds through the system.”

Marc Williams, a spokesperson for the state’s Medicaid program, confirmed Tuesday afternoon that HCPF was “unable to access federal funds yesterday or this morning in accordance with our standard operating procedures,” but access has since been restored.

“This afternoon, HCPF was able to access the federal payment system and submit our standard request for federal matching funds for all HCPF-administered programs; we are now awaiting the wire transfer of funds from the federal government,” Williams said. “We are anticipating federal fund transfers to enable future payments.”

Community health centers

The Colorado Community Health Network, an organization representing 20 community health centers across the state, said Tuesday that the freeze would have the “immediate impact of preventing nearly $9 million in monthly payments that are used to cover payroll and other costs.” Federally qualified community health centers are typically located in underserved areas and serve patients regardless of their ability to pay.

“Colorado Community Health Network calls on the Trump Administration, including Acting Health and Human Services Secretary Dr. Dorothy Fink, and Congress to lift this freeze in funding immediately to ensure communities across America continue to have access to life-saving preventive and primary care services,” the organization wrote in a statement.

Rural hospital funding

Hickenlooper’s office identified a list of grants to rural hospitals that would be affected by the freeze, including $1.25 million to expand access to opioid and substance use disorder treatments in Moffat County; $200,000 for providers San Miguel County; and $100,000 each for Archuleta and Mesa counties.

Homeless shelters

Shelters and other services serving unhoused Coloradans rely heavily on grants from the Department of Housing and Urban Development to operate.

Lisa Sweeney-Miran, the director of a homeless shelter in Boulder, said that news of the funding freeze is causing agencies to halt projects related to building supportive housing and evaluate what services they’ll have to cut to stay afloat.

“If this order stands as-is, I think you can expect to see widespread shutdowns — some agencies will be able to last longer than others, but all of us rely heavily on tax dollars to house and help,” Sweeney-Miran said.

Head Start

Along with Medicaid payment systems, there were widespread reports Tuesday that the reimbursement portal for the federal Head Start program, which provides grants for early childhood education, was down nationwide, though

Nearly 9,000 Colorado children enrolled in Head Start programs could be affected by the loss of funding, according to Hickenlooper’s office, and the freeze could also apply to funding through the Child Care and Development Block Grant program, which served another 10,000 Colorado kids.

Colorado Newsline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com.