AUSTIN, Texas — Across Central Texas, organizations spent Tuesday scrambling to determine how a freeze on nearly all federal grants and loans would affect them.
In a memo Monday night, the White House Office of Management and Budget instructed all federal agencies to stop spending on financial assistance programs if they suspect they could conflict with President Donald Trump’s recent executive orders.
The freeze could stop hundreds of billions of dollars in federal spending on housing assistance, disaster relief, transportation and more. The directive isn’t specific about which financial aid programs would be suspended.
Agencies had until 5 p.m. Tuesday to comply with the directive, but minutes before that deadline, a federal judge paused the planned freeze and set a hearing for further arguments for Monday, Feb. 3. Two lawsuits, one by several nonprofit organizations and another by a coalition of state attorneys general, were filed on Tuesday.
White House Press Secretary Karoline Leavitt said the Trump administration is looking to weed out spending on DEI, gender issues and the Green New Deal that conflict with the president’s executive orders.
“It means no more funding for the Green New Scam that has cost American taxpayers tens of billions of dollars,” Leavitt said at a White House briefing on Tuesday. “It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies.”
While it is not clear exactly which programs would be be halted, one clear thing is the order has created widespread confusion. Throughout Tuesday, there were frantic scrambles in schools, hospitals, nonprofit organizations and research companies as staff tried to figure out how the freeze might impact them.
In a statement on Tuesday, Austin City Manager T.C. Broadnax told KVUE that the city is compiling a list to determine the total amount of grant funding for city programs that could be affected. He called federal grant funds and the services they go toward “vitally important to all communities.”
“They support things like housing needs, nutrition programs for children, safe streets and roads, and basic medical care for low-income seniors. This is a critical issue precisely because it impacts so many basic services,” Broadnax said. “We will continue monitoring this evolving situation and make necessary adjustments as we gain more insight on the specific impacts.”
In an interview with KVUE on Tuesday morning, Mayor Pro Tem and District 2 Councilmember Vanessa Fuentes said the order could have a detrimental impact.
“We rely on that type of federal-local partnership to address some of our biggest challenges – housing, homelessness, health care, you name it. There’s so much that we do in partnership with our federal government,” Fuentes said. “I’m very concerned about the news that came out yesterday, which puts many of our programs and services at risk.”
Meals on Wheels of Central Texas said the lack of clarity and uncertainty creates chaos and puts its programs at risk.
The organization distributes more than 3,000 meals daily to seniors and those with disabilities in Central Texas. The primary source of federal funding for senior nutrition programs, like Meals on Wheels, is the Older Americans Act Nutrition Programs, a grant distributed by the Federal Administration on Aging.
“it’s chaotic for our team, who are coming in and not knowing what this meant,” CEO Henry Van de Putte said. “What we’ve focused on is a lot of learning. What is a federal program and how many federal dollars are in each of our programs to ensure folks understand that everything we do here at Meals on Wheels is uber local. We take any of those government dollars and leverage philanthropic dollars volunteers, so it’s not overly dependent on any source.”
Van de Putte said the seniors and Texans with disabilities Meals on Wheels serves “will panic not knowing where their next meals will come from.”
“We’ve seen people calling asking questions about what this arises,” he said. “That’s been the number one overwhelming issue.”
Even if there is a stopgap in federal funding, Meals on Wheels said it will still be able to provide critical services like meal delivery. The organization is moving things around and leveraging resources to ensure it can continue to do so without any interruption.
“What’s important right now is the uncertainty. As fast as that came, if we could clear that off, that will go a long way,” Van de Putte said. “It’s about the people knowing that when they wake up tomorrow, anytime between 11 and noon, they’re still going to get that meal. They’re still going to get that meal delivered to their door, and they’re going to get someone who looks at them, who puts eyes on the power of the knock to make sure they’re okay.”
The longer it drags on, the more uncertainty there is, so Van de Putte said they hope for clarity soon.
“Right now, for us, it’s a space where we need to listen to how our neighbors, how the people we serve get by every day, really go beyond they’re just okay and understand that there’s a plan and that I’m not sure, in a time before we would have to go that deep with each person, but we have to make sure that there’s a plan to make sure that folks have that dignity and independence to live on their own as long as they can, because of the community support that Central Texas provides,” he said.
In 2021, Texas received $105 billion from the federal government. In 2026, the state comptroller said Texas received a third of its annual budget from federal grants. That funding goes to various projects in the fields of health, education, business, economic development and transportation.
Like many school districts, Del Valle ISD is trying to figure out what the pause on federal grants means for the district. A spokesperson said the district gets federal funding through grants that support nutrition, special education and after-school programs
“Any disruption, reduction, or elimination of funding for these programs could have a devastating impact on services that provide meaningful support to our students,” the spokesperson said.
The only things explicitly excluded from the freeze are Medicare and Social Security benefits, plus “assistance provided directly to individuals” like welfare and food stamps.
“If you are receiving individual assistance from the federal government, you will continue to receive that,” Press Secretary Leavitt said. “It is the responsibility of this president and this administration to be good stewards of taxpayer dollars.”
The freeze does not impact federal student loans, Pell grants, Head Start, small business grants and rental assistance. The White House hasn’t said if Medicaid will be affected.
While it’s said to be temporary, no end date has been set for the potential funding pause.