A White House order caused a scattershot “freeze” in federal funding for programs and nonprofit organizations nationwide and set off chaos and confusion in Hawaii and other states this week, as officials scrambled to identify programs and services under threat.
Though Medicaid, Social Security and Medicare were soon clarified to be exempt from the ordered “pause,” the order sent shock waves through state agencies delivering a variety of essential services, as administrators raced to decipher whether their operations would be affected. Issued by the Office of Management and Budget (OMB) on Monday, the order called for a “temporary pause” on “all Federal financial assistance … implicated by” executive orders issued by President Donald Trump since he took office this month. What a mess.
The short-lived order never officially went into effect — it was blocked by a court Tuesday and rescinded early Wednesday — but several U.S. agencies essentially jumped the gun on Tuesday and temporarily halted funding operations. Nonprofit and public health organizations immediately filed lawsuits, as did a coalition of 22 attorneys general, including Hawaii’s, spurring the judicial block. With strong arguments in play that the U.S. Constitution prevents wholesale executive branch reversals of spending approved by Congress, the Trump administration revoked the order.
Even if in agreement with the need to reform bloated federal bureaucracy, the bumbling action was a poorly executed effort. Many residents in Hawaii and nationwide were unduly frightened by the uncertainty, and extreme care is owed the public to ensure that similar missteps do not reoccur.
Further, Hawaii’s public and nonprofit bodies must remain on alert, because while the “pause” has been rescinded, Trump’s executive orders have not. There may well be additional legal clashes over the federal administration’s constitutional authority to “rescind already allocated dollars that have been included in recipient budgets,” as Hawaii’s and 21 other attorneys general characterize it in their court complaint.
The spending scare highlighted Hawaii’s dependence on federal funding for services that many would consider essential. Hawaii departments and agencies rely on 2,600 different federal “accounts,” Lt. Gov. Sylvia Luke told the Honolulu Star-Advertiser, and of the state’s $17 billion budget, Luke said half comes from special and federal dollars.
Luke raised the prospect that Trump might target federal spending in support of Compacts of Free Association citizens from Micronesia, the Marshall Islands and Palau, and their access to federal benefits. Congress rightly approved this inclusion in budget legislation last year — an act worth “hundreds of millions of dollars” to host governments in Hawaii, Guam, Arkansas and other states.
Further, the president has talked about dismantling the Federal Emergency Management Agency, potentially jeopardizing hundreds of millions of dollars in hoped-for and needed support to Lahaina wildfire survivors, recovery and rebuilding.
Gov. Josh Green has committed that Hawaii will “develop alternate plans” for continuing “key services” for residents, should expected or longstanding funding be undermined. This will require setting priorities — and this is where cooperation with the Trump administration must be mined, as much as possible. Still, this week’s funding-freeze scare is a wake-up call to states that little is out of the realm of possibilities, for good or for ill.
On Wednesday, Trump said his intent was to trim “big bureaucracy, where there has been tremendous waste and fraud and abuse.” No argument there: While Americans may differ on policy and programs, all should agree that increased efficiency and less wasted effort on redundant or ineffective actions is desirable. Those same virtues of efficiency and less wasted effort, though, should also apply to an actual coherent strategy to reform big government.
