Background
Late in the day on Monday, Jan. 27, the Office of Management and Budget (OMB) issued a memo requiring Federal agencies to pause a large percentage of federal grants and loans. The pause was to go into effect at 5 pm ET on Tuesday, Jan. 28. All federal agencies were given until February 10 to review their grants, loans and programs to ensure that they align with the new administration’s priorities and restrictions. Specifically, the memo states “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 created widespread chaos and confusion due to its lack of detail or clear reasoning. Several lawsuits were filed throughout the day on Tuesday, including one by state attorneys general from 22 states and Washington, D.C. Just before the 5 pm deadline, a U.S. District Court judge put a pause on the order which is in effect until Monday, Feb. 3. A ruling is expected next week.
Earlier today, the White House has rescinded the original memo. It is possible a revised memo may be issued in the future. Additionally, the underlying Executive Orders are still in effect.
A freeze on federal grant and loan funding would have widespread consequences
Unsurprisingly, vulnerable communities and individuals and families who rely on government assistance programs would be disproportionately impacted by any pause on federal grant and loan funding.
- Homelessness: With housing assistance programs potentially frozen, individuals and families at risk of homelessness could be left without support. This is especially dangerous given that the number of individuals and families experiencing homelessness has never been greater. A disruption to rental assistance and other housing programs would mean even more people on the street without housing.
- Health care disruptions: HCH health centers, which provide care to nearly one million unhoused people, would be unable to continue services. Medicaid, which provides health coverage to more than half of HCH patients, would also see disruptions to insurance coverage.
- Mental Health Programs: Federal grants help fund mental health services for vulnerable populations, including low-income individuals and those living in rural areas. A freeze would limit the ability of many local and state programs to provide essential services like counseling, therapy, and crisis intervention.
- Substance Abuse Treatment: Treatment centers often rely on federal funding to provide rehabilitation programs, addiction recovery services, and outpatient treatments. A freeze would hinder these programs’ ability to operate at full capacity, potentially reducing available beds, access to treatment, and the quality of care.
- Program closures: Organizations that provide services for marginalized populations (e.g., racial minorities, refugees, disabled individuals) could see their programs suspended due to a sudden lack of funds. This could affect millions of people who rely on services like legal aid, domestic violence shelters, or job training programs.
- Loss of jobs: Nonprofits often employ large numbers of people in the social services sector. A funding freeze could lead to layoffs, leaving many without work. The nonprofit sector employs over 12 million people in the U.S.
- Delays or reductions in benefits: People relying on public assistance for food, healthcare, or housing might experience delays or a reduction in benefits. In 2023, about 43 million people in the U.S. were enrolled in the Supplemental Nutrition Assistance Program (SNAP).
Suggested Guidance for HCH Programs
- Draw down funding now: Federal funding portals appear to be open, for now. Draw down all available funding now, per the terms of your respective funding agreements.
- Identify values: Develop guiding principles rooted in your vision, mission, values, and strategic plan to help manage risk and navigate uncertain environments.
- Create contingency budget plans: Consider how your program will respond to lower patient visits, lost Medicaid revenue, and other changes in programs/services. Evaluate the availability of other funding sources that may offset the impact of state/federal budget reductions. Run table-top scenarios with leadership and management teams to determine the implications of these policy changes on clinical operations, medical/behavioral health services, financial outlook, community relations, human resources, etc.
- Communicate with staff and clients: Talk with patients and staff about any policy changes happening at the state or federal level, and what impact those have on your program. Hold space for clients and staff to talk about how they are being impacted and anticipate greater anxiety (especially among BIPOC, LGBTQ+, and undocumented people/mixed status families).
- Strengthen your program data: Ensure your health center and/or medical respite care data demonstrates the quality of care and cost-effectiveness of services. This will be vital to both federal and state advocacy to retain program funding, Medicaid eligibility, and coverage of 1115 waiver services. [Resources: HITEQ ROI methodology tool and Using Data to Promote Health Equity]
- Collect stories: Ask patients and staff to share their perspective on why Medicaid and health center or medical respite care services are vital to maintain. This is especially important for “extra” services such as tenancy supports in housing and medical respite care, or optional.
Ways to Take Action
The burst of Executive Orders the last nine days is a deliberate effort to overwhelm the opposition to any single part of this President’s agenda. It is important to remain focused on our mission and goals and the individuals we serve. Here are some immediate ways to take action:
- Communicate with your elected officials and policymakers: Write letters or emails, make phone calls, attend town halls and public meetings. Help your elected leaders understand the potential impact even a temporary pause in federal funding would have on the individuals you serve. Focus on real stories and real people. (Find your federal representatives here.)
- Engage in social media campaigns: Social media platforms can be a powerful tool for organizing, sharing information, and mobilizing people. Posting personal stories, data, and information about the impact of funding cuts can increase awareness. Use hashtags, engage with advocacy organizations online, or start a grassroots hashtag campaign to raise visibility.
- Raise Public Awareness: Consider writing an opinion piece for local newspapers or online publications to help spread the message to a broader audience. Organizing or attending local rallies and protests can show visible public opposition to funding cuts, drawing more attention to the cause.
- Mobilize your own network: Identify strategic allies and partners and encourage them to contact elected officials on your behalf. Arm them with information and simple, clear talking points.