New York officials are scrambling to respond to President Donald Trump’s federal funding freeze, a move that threatened essential services for millions of New Yorkers. The freeze, which was announced in a memo on Monday, would strip the city of billions in federal grants and loans, potentially putting funding for housing assistance, school lunch programs, and other vital resources at risk. Attorney General Letitia James joined attorneys general from 22 states and the District of Columbia in suing the Trump administration to stop the directive. A federal judge temporarily blocked the order on Tuesday before it would have taken effect. Update 1/29/25: On Wednesday, the Trump Administration rescinded the memo “to end any confusion on federal policy created by the court ruling and the dishonest media coverage.”
“Immediately blocking the majority of federal funds to states is unconstitutional and dangerous. Millions of Americans rely on federally funded programs every day to get the health care they need, support their families, and stay safe in their communities,” James said in a statement.
“Already, this policy has unleashed chaos and uncertainty, with law enforcement halting drug enforcement efforts, Medicaid portals shutting down, and other critical services being thrown into disarray.”
The freeze is part of Trump’s efforts to end diversity, equity, and inclusion programs, the Green New Deal, and funding for non-governmental organizations that “undermine the national interest,” according to a memo from the White House’s Office of Management and Budget.
Programs at risk include funding for hospitals and infrastructure and disaster relief from FEMA, which is currently supporting relief efforts for the Los Angeles fires and continuing to help New York City recover from the pandemic.
According to the memo, programs that provide direct benefits to individuals—such as the Supplemental Nutritional Assistance Program (SNAP), Medicaid, Medicare, Social Security, Pell Grants, and rental assistance—are not subject to the pause. However, all states have been locked out of the Medicaid reimbursement system, James reported.
The National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE have already filed a lawsuit in federal court challenging the order, which was slated to take effect at 5 p.m. on Tuesday. A federal judge issued a ruling shortly before then, delaying the order until February 3, according to The City.
New York relies on roughly $93 billion in federal aid, with a majority going towards Medicaid, providing health coverage for seven million people across the state. The city receives around $10 billion in federal funding, according to the Citizens Budget Commission.
Rachel Fee, executive director of the New York Housing Conference, a nonprofit that advocates for affordable housing in NY, said the Trump administration’s action puts millions of Americans at risk.
“This halt will delay critical rental assistance, stall affordable housing projects, and harm low-income families, seniors, and people with disabilities, who rely on HUD programs to stay safely housed,” Fee said in a statement.
“Delaying and disrupting assistance for renters living paycheck to paycheck is unconscionable. We urge the Office of Management and Budget to release HUD funding in order to prevent devastating consequences for those already struggling to make ends meet.”
The funding freeze would affect several state agencies, including the Metropolitan Transportation Authority, other transit agencies, and public universities. It could also disrupt billions of dollars allocated to New York through former President Biden’s infrastructure bill, including $12 billion for the Gateway Tunnel, $4.5 billion for the MTA, and $2.3 billion for other city efforts.
City Comptroller Brad Lander and other officials are urging Mayor Eric Adams to take legal action or join existing lawsuits to protect the city’s funding.
Lander, who is running for mayor, urged the mayor to file a new legal action or join the existing suit against Trump’s order.
“NYC cannot wait to see how the memo plays out. President Trump is illegally breaking promises that the federal government made to the City of New York,” Lander said in a statement. “I call on the Mayor and Corporation Counsel to file or join a lawsuit against this illegal action, to make sure federal resources are administered in accordance with the law. This is no time to cower in the face of a bully who is stealing our lunch money.”
Adams did not explicitly state whether the city would get involved in legal action, stopping short of speaking against Trump but ensuring he would “advocate firmly” for the city’s best interest.
“New Yorkers’ federal income tax dollars are some of the highest in the country,” Adams said in an official statement. “For decades, we have worked with the federal government to bring a huge chunk of those tax dollars back to the five boroughs to pay for critical services New Yorkers rely on and to better the lives of our city’s 8.3 million residents.”
Adams continued: “We are assessing the full reach of the administration’s announcement, as specific programs are not named in the memo. We are in touch with our federal counterparts as we continue to monitor this situation closely, and we will advocate firmly on behalf of New Yorkers whose lives are impacted by affected programs.”
Lander went on to claim that Adams, who has stepped away from public appearances this week due to a reported illness, has not taken action against the order due to his hopes that the president will pardon him for his federal indictment.
“Today, perhaps that has to do with his illness, and I want everyone to be healthy,” Lander said, according to AMNY. “But in days even before that, Mayor Adams has appeared as someone more interested in seeking a pardon for himself than standing up for the people who elected him.”
Gov. Kathy Hochul said she plans to work with Attorney General James on litigation to “ensure funds are delivered to New York.”
As Politico reported, at an unrelated event on Tuesday, Hochul said: “There has to be a strategy that says, ‘Washington, do you realize the consequences of what you’ve done here? And do you really want us to not fund law enforcement? Really want us to not fund roads and bridges?’”
“The one thing we’re not going to do is panic,” the governor added.
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