Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Connie Juarez-Diroll, Chief Legislative Officer
Subject: State and Federal Legislative Update #1-Federal Funding Freeze
RECOMMENDATION:
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Accept an informational report on the 2025 State and Federal Legislative sessions.
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BACKGROUND:
On Monday, January 27th, acting Director of the Office of Management and Budget (OMB) Matthew Vaeth issued a sweeping memorandum calling for a temporary freeze on nearly all federal funding for grants and loans effective 5:00 p.m. on January 28th.
DISCUSSION:
Federal Update - Federal Funding Freeze
Before the 5:00 p.m. deadline on the 28th, a legal challenge to the memo was brought before a District Court in Washington, D.C., and a federal judge issued an administrative stay, pausing the freeze until February 3rd. The judge’s stay came in response to a lawsuit filed by an organization that argued that the order was unconstitutional, owing to Congress’ well-established power of the purse and the terms of the Impoundment Control Act, which requires the president to report any withholding of congressionally appropriated funds promptly and to abide by the outcome of the congressional impoundment review process.
On Wednesday, January 29th, OMB issued another memo rescinding the one released on the 27th. At the time, it was believed that the rescission of OMB’s memo would end the funding freeze. However, about an hour later, White House Press Secretary Karoline Leavitt posted on X, clarifying that rescinding the memo does not, in fact, lift the funding freeze.
Following these actions, a coalition of 22 state attorneys general sought a restraining order in a District Court in Rhode Island. They argued that public statements and the X post indicate “the original sweeping spending freeze is still in effect, even if the OMB memo describing it has been pulled.”
On Friday, January 31st, a U.S. District Judge in Rhode Island issued a temporary restraining order (TRO) against the funding freeze, citing the White House’s contradictory signals about the policy. The TRO states that the President, OMB, and other federal defendants “shall not pause, freeze, impede block, cancel, or terminate Defendants’ compliance with awards and obligations to provide federal financial assistance to the States, and Defendants shall not impede the States’ access to such awards and obligations, except on the basis of the applicable authorizing statutes, regulations, and terms.”
Finally, on Monday, February 3rd, the same Washington, D.C. federal judge who issued the administrative stay issued a second TRO, concluding the federal government had not offered a rational explanation for pausing “practically overnight” as much as $3 trillion in federal financial assistance. The judge also found that, despite OMB’s withdrawal of its original memo directing the freeze, there remained concerns that funding could still be withheld or reinstated arbitrarily. The court emphasized that the Administration's actions may have overstepped constitutional boundaries by infringing Congress’s authority over federal spending.
As the legal challenges to President Trump’s directive continue to play out, it remains unclear whether the White House will abide by its decision to rescind the temporary freeze or issue a narrower directive. Some legal experts have speculated that the White House memo was intended to spark the current string of litigation and set the stage for a legal challenge to the Impound Control Act.
For his part, Russ Vought, President Trump’s nominee to head the OMB, argued last week that the Act is unconstitutional and that the President should be granted broad authority to withhold funds appropriated by Congress.
Assessment of Potential County Impacts
The County’s federal advocacy team, Carpi & Clay, will update your Board on the Trump administration’s actions to date. The County’s state advocacy team, Political Solutions, will focus on the state’s response to Trump’s actions, including those of Governor Gavin Newsom and the Legislature.
The attached table, prepared by the Intergovernmental and Public Affairs (IGPA) Unit of the County Executive’s Office, details by department the federally funded programs and services that could be at risk of defunding due to changes by the Trump administration. Although some of the listed programs were not explicitly listed in the OMB’s follow-up instructions to Federal agencies, departments have provided information on all federal program funds they are concerned about, given the administration’s directives.
Additional Federal Actions - President Trump Issues Slate of Executive Orders (EOs)
In addition to the OMB directive, President Trump began his second term by issuing a slate of EOs and memoranda affecting a broad swath of federal policy, including restructuring the government, addressing immigration, and repealing diversity programs. The administrative changes included repealing former President Joe Biden’s policies, implementing a federal workforce hiring freeze, and creating the Department of Government Efficiency (DOGE). Notable EOs include:
• Regulatory Freeze Pending Review <https://www.whitehouse.gov/presidential-actions/2025/01/regulatory-freeze-pending-review/>: directs federal agencies to freeze rulemakings, rescind unpublished rules, and postpones the effective date of any previously published rules by 60 days.
• Declaring a National Emergency at the Southern Border of the United States <https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-emergency-at-the-southern-border-of-the-united-states/>: declares a national emergency related to immigration at the US-Mexico border and aligns federal resources to address immigration concerns.
• Putting People Over Fish: Stopping Radical Environmentalism to Provide Water to Southern California <https://www.whitehouse.gov/presidential-actions/2025/01/putting-people-over-fish-stopping-radical-environmentalism-to-provide-water-to-southern-california/>: directs the Secretaries of Commerce and the Interior to “route more water from the Sacramento-San Joaquin Delta to other parts of the state for use by the people there who desperately need a reliable water supply.”
• Emergency Measures to Provide Water Resources in California and Improve Disaster Response in Certain Areas <https://www.whitehouse.gov/presidential-actions/2025/01/emergency-measures-to-provide-water-resources-in-california-and-improve-disaster-response-in-certain-areas/>: directs all federal agencies to take all measures consistent within their authority to ensure adequate water resources in Southern California to manage the wildfires. Directs the Secretary of the Interior to use authorities to increase hydropower generation in the Central Valley Project (CVP) to increase water storage and conveyance. Directs OMB to review “all Federal programs, projects, and activities for all relevant agencies that impact land management, water supply, water storage and delivery, water infrastructure, and disaster preparedness and response.” Directs additional federal aid to restore housing, remove waste, and increase fire preparedness in California, and additional housing and infrastructure aid to areas affected by Hurricane Helene.
• Unleashing American Energy <https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-american-energy/>: supports the advancement of energy and natural resources projects but also seeks to halt EV programs and grants established by the Bipartisan Infrastructure Law and the Inflation Reduction Act.
• Declaring a National Energy Emergency <https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/>: revokes the Council on Environmental Quality’s authority to tell agencies how to comply with the environmental review process for energy projects.
• Council to Assess the Federal Emergency Management Agency <https://www.whitehouse.gov/presidential-actions/2025/01/council-to-assess-the-federal-emergency-management-agency/>: creates a 20-member council to review federal emergency management policies, practices, and authorities to provide “immediate, effective, and impartial response to and recovery from disasters.”
• ’Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Governments Leasing and Permitting Practices for Wind Projects <https://www.whitehouse.gov/presidential-actions/2025/01/temporary-withdrawal-of-all-areas-on-the-outer-continental-shelf-from-offshore-wind-leasing-and-review-of-the-federal-governments-leasing-and-permitting-practices-for-wind-projects/>: rescinds offshore wind leasing areas and directs a review of all permitting for both onshore and offshore wind.
• Removing Barriers to American Leadership in Artificial Intelligence <https://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/>: outlines policies and provisions related to artificial intelligence (AI), including the development of an AI Action Plan within 180 days.
• ’Establishing and Implementing the Presidents “Department of Government Efficiency” <https://www.whitehouse.gov/presidential-actions/2025/01/establishing-and-implementing-the-presidents-department-of-government-efficiency/>: creates and authorizes the Department of Government Efficiency (DOGE) to be led by Elon Musk.
• Keeping Americans Safe in Aviation <https://www.whitehouse.gov/presidential-actions/2025/01/keeping-americans-safe-in-aviation/>: specifically directs the Federal Aviation Administration (FAA) to end all DEI-related practices in the agency’s hiring practices.
• Immediate Assessment of Aviation Safety <https://www.whitehouse.gov/presidential-actions/2025/01/immediate-assessment-of-aviation-safety/>: directs the Secretary of Transportation and Administrator of the FAA to “review all hiring decisions and safety protocols made during” the previous administration and “to take such corrective action as necessary to achieve uncompromised aviation safety.”
• Return to In-Person Work <https://www.whitehouse.gov/presidential-actions/2025/01/return-to-in-person-work/>: requires federal agencies to begin terminating remote work arrangements and bring the federal workforce back into the office.
• Hiring Freeze <https://www.whitehouse.gov/presidential-actions/2025/01/hiring-freeze/>: orders a federal hiring freeze for civilian positions across the executive branch. Within 90 days, OMB must develop a plan to reduce the federal workforce through efficiency and attrition. The freeze will expire for most agencies once the plan is issued, except for the IRS, where it remains in effect until further notice. The freeze does not apply to military personnel, positions related to immigration enforcement, national security, public safety, or services for Social Security, Medicare, or Veterans’ benefits.
• Restoring Accountability to Policy-Influencing Position Within the Federal Workforce <https://www.whitehouse.gov/presidential-actions/2025/01/restoring-accountability-to-policy-influencing-positions-within-the-federal-workforce/>: reinstates and expands Schedule F, reclassifying certain federal positions as "Schedule Policy/Career" which allows for the reassignment or dismissal of federal employees in these positions who are deemed underperforming or not aligned with the administration’s policies, reversing restrictions imposed by the previous administration.
• Restoring Accountability for Career Senior Executives <https://www.whitehouse.gov/presidential-actions/2025/01/restoring-accountability-for-career-senior-executives/>: increases accountability among Senior Executive Service (SES) officials, ensuring they align with the administration’s policies. The directive calls for new performance plans, reassignments, restructuring of oversight boards, and potential removal of SES members whose performance is deemed inconsistent with their duties.
• Reforming the Federal Hiring Process and Restoring Merit to Government Service <https://www.whitehouse.gov/presidential-actions/2025/01/reforming-the-federal-hiring-process-and-restoring-merit-to-government-service/>: reforms federal hiring practices by emphasizing merit-based recruitment and enhancing efficiency.
• Ending Radical and Wasteful Government DEI Programs and Preferencing <https://www.whitehouse.gov/presidential-actions/2025/01/ending-radical-and-wasteful-government-dei-programs-and-preferencing/>: terminates federal diversity, equity, inclusion (DEI), and environmental justice programs. All DEI-related positions, programs, mandates, and training, including "Chief Diversity Officer" roles and "equity action plans," are to be ended within 60 days. The Assistant to the President for Domestic Policy will monitor agency compliance, assess barriers to implementation, and recommend additional measures to ensure adherence to the order.
• Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government <https://www.whitehouse.gov/presidential-actions/2025/01/defending-women-from-gender-ideology-extremism-and-restoring-biological-truth-to-the-federal-government/>: establishes a federal policy recognizing two immutable biological sexes, male and female, and aims to ensure that all federal policies, regulations, and enforcement actions adhere to this distinction. Federal agencies and departments must use sex-based definitions in all regulations, policies, and official documents. Additionally, federal identification documents (e.g., passports) must reflect biological sex. The order also dissolves the White House Gender Policy Council.
• Protecting Children from Chemical and Surgical Mutilation <https://www.whitehouse.gov/presidential-actions/2025/01/protecting-children-from-chemical-and-surgical-mutilation/>: prohibits federal funding for gender transition procedures, including puberty blockers, hormone treatments, and surgeries, for individuals under 19 years of age. The order also directs federal agencies to review policies related to insurance coverage, restricting the use of federal funds for insurers that cover such treatments for minors, and mandates a review of medical guidelines related to gender dysphoria in children.
FISCAL IMPACT:
The exact fiscal impacts on the County are unknown at this time, given ongoing litigation and the administration's lack of clarity regarding specific program changes. However, a preliminary review of Federal funding received by the County indicates that, based on information released by the Trump administration to date, as much as $612.5 million in funding could be at risk.
EQUITY IMPACT:
The County’s 2025 Legislative Program supports policies that further and enhance equity goals in addressing the needs of underserved, disadvantaged, or marginalized residents.