How President Trump's federal funding freeze could impact Minnesota

The State of Minnesota says it is trying to traverse potential impacts of a federal funding freeze that was set to be put in place by President Trump's administration on Tuesday.

Federal funding freeze: What to know

What we know:

President Trump announced he is pausing federal loans and grants as his administration reviews spending. The pause is part of President Trump's pledge to take on the federal deficit.

The pause was expected to take effect starting Tuesday evening. However, in a late afternoon decision, a judge blocked the freeze from going into place.

The block came amid growing concerns from lawmakers and local officials about the downstream impacts on health care and other projects.

Officials worried a Medicaid portal outage on Tuesday was related to the freeze. However, the Trump admin said the freeze was unrelated and the portal was back online by Tuesday afternoon.

Later in the day, Minnesota Attorney General Keith Ellison announced Minnesota had joined the lawsuit to stop the funding freeze.

U.S. President Donald Trump speaks during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, DC. (Photo by Andrew Harnik/Getty Images)

What they're saying:

Speaking at a morning news conference, new White House press secretary Karoline Leavitt made it clear the freeze would not impact individual assistance.

She assured the public the freeze was targeting wasteful programs, including, she said, the Green New Deal, "illegal" DEI programs, "transgenderism and wokeness."

"If you are receiving individual assistance from the federal government, you will continue to receive that," she explained. "However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars."

Leavitt said programs like Social Security, Medicare, food stamps, welfare, and others won't be impacted. She also discussed some wasteful spending the administration had already stopped.

"DOGE and OMB have actually found that there was $37 million that was about to go out the door to the World Health Organization (WHO), which is an organization, as you all know, that President Trump, with the swipe of his pen and that executive order, no longer wants the United States to be a part of," Leavitt added. "DOGE and OMB also found that there was about to be $50 million taxpayer dollars that went out the door to fund condoms in Gaza. That is a preposterous waste of taxpayer money. So that's what this pause is focused on – being good stewards of tax dollars."

Gov. Walz rips funding freeze

What they're saying:

During a news conference of his own, Gov. Tim Walz lambasted the federal funding freeze, saying it is cutting off funding for law enforcement, farmers, schools, child care, veterans and health care. He also said the pause would affect funding for programs like the YMCA, where he appeared in front of the media. 

"While [Trump] was out golfing, he threw the country into crisis," Walz said. "Minnesota is a state that pays far more into the federal government than we get back. Those are our dollars he is stealing unconstitutionally. Congress, as I served, as Attorney General Ellison served, appropriates the dollars. This is so far beyond the pale to pull these dollars back."

Walz accused the president of not understanding the full impact of the move and his administration of failing to provide proper guidance ahead of the pause.

"We'll see you in court," Walz said to the Trump administration.

What's next:

Ellison also called the pause "unconstitutional" and "a violation of the rule of law."

"It takes away programs people rely on that their representatives have voted for and passed," said Ellison.

Ellison says the grounds for the lawsuit are a violation of the Administrative Procedure Act and operating beyond his authority.

Local perspective:

In a post on Tuesday afternoon, Senators Amy Klobuchar and Tina Smith also issued rebukes of the freeze.

"The reckless funding freeze by the Trump administration jeopardizes everything from community health centers to cancer research to child care to critical infrastructure projects," Sen. Klobuchar wrote in a social media post. "It is an unconstitutional power grab that puts lives and livelihoods at risk."

In a later statement, Klobuchar added "This unprecedented and unconstitutional move is causing chaos and jeopardizing critical support for everything from pediatric cancer research to equipment for our first responders. Much of this funding passed Congress with strong bipartisan support and Americans count on these services every day. The Administration must reverse course and stop playing games with the American people." 

Sen. Smith also called on Republicans to take action to prevent any impact. "I’ve heard from community health centers in Minnesota who are already looking at layoffs by the end of the day. May not be able to make payroll at the end of the week," Smith wrote. "Republicans need to grow a spine here. This isn’t a game, it’s people’s lives."

Congresswoman Betty McCollum called the freeze an "illegal and unconstitutional action" by Trump.  

"President Trump told the American people that he wanted to be a dictator on day one. Now in office, he and his administration are following through with illegal and unconstitutional actions that directly threaten Americans’ economic, personal, and national security," McCollum wrote in a statement Tuesday.

Funding freeze impacts on Minnesota

Programs impacted:

At the news conference on Tuesday, Walz outlined the impact of the freeze. While his staff is still trying to determine the full impact, they listed the following programs that will be impacted by the freeze.

Minnesota Management and Budget Commissioner Erin Campbell said there are just under 1,000 state programs funded with federal money in Minnesota that could be impacted by a freeze along with several thousand workers who may face furloughs or cuts.

In a message to students and staff, the University of Minnesota said it was trying to assess the impact of a freeze.

The full statement reads:

"Many of you have heard reports that several federal agencies have paused activities affecting federally-funded research. University leadership is closely tracking proposed changes, all executive orders, and the direction by the Office of Management and Budget to all departments and agencies. A team is assembled to assess and respond on behalf of our community. 

"The team will draw on the expertise of leaders across the University, internal and external experts, and our peer institutions and professional associations. We are reviewing all guidance and updates as they emerge to determine what they mean for our students, faculty, and staff, and for our programs dedicated to the education, research, and outreach missions of the University.

"Of immediate interest to many—there is no impact to Pell grants or direct loans.

"Our priority is to work with policymakers and remain focused on supporting the great work of the University, so that all of us can continue to deliver on our mission of world-class education, leading-edge research, and vibrant community engagement and outreach. We will not waver in our dedication to serving you, all Minnesotans, our nation, and world."

In addition, the funding pause threatens the state’s community health centers, which rely on federal dollars to provide services to 170,000 low-income patients.

"It’s just a catastrophic incident if this moves forward," said Jonathan Watson, the CEO of the Minnesota Association of Community Health Centers. "I’ve had conversations with them today, where they’re looking at immediate closures of their facilities within the next two weeks."

PoliticsTim WalzDonald J. TrumpEconomyKeith Ellison