Rescinded federal spending memo left officials scrambling in Snohomish County

EVERETT — A memo from President Donald Trump’s budget office sent Monday appeared set to pause grants, loans and other financial assistance from federal agencies to nonprofits and local governments, but a judge temporarily blocked the plans on Tuesday.

On Wednesday, the Trump administration rescinded the memo.

“This is an important victory for everyone who made their voices heard,” Washington Sen. Patty Murray wrote Wednesday on X. “Undoubtedly, the Trump admin caused serious chaos & real harm through a combination of sheer incompetence, cruel intentions, and disregard for the law.”

Federal agencies awarded more than $170 million in grants and loans to tribes, municipalities, schools and nonprofits in Snohomish County over the past year, according to federal spending data. The money goes toward infrastructure improvements, preschool programs, affordable housing, health centers and public utility improvements, among other uses.

It’s unclear how much those funds would be impacted if the pause went into effect.

Monday’s memo, sent by Matthew Vaeth, the acting director of the budget office, said federal agencies must temporarily pause all activities related to obligation and disbursement of federal financial assistance to ensure that all spending complies which the president’s new executive orders.

The temporary pause would not “apply across-the-board,” a White House memo released Tuesday read. It is “limited to programs, projects and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.”

A separate document the budget office released Tuesday morning lists the thousands of programs that could be impacted. They include highway planning and construction, assistance to law enforcement, water infrastructure improvements and health care research. It even lists the national school lunch program and burial expense allowances for veterans as programs that could have funding halted.

“Snohomish County has notified us to spend down our ARPA funding by 5 pm today or we could lose access to it, even though the budget was approved through congress for 2025,” wrote Joan Penney, a spokesperson for affordable housing nonprofit Housing Hope, in an email.

Funds from the American Rescue Plan Act help Housing Hope cover costs that help house more than 2,000 people throughout Snohomish County.

The pause would not have affected assistance paid to individuals, like Medicare, Social Security, welfare and food stamps, the White House press secretary said in a conference Tuesday morning. Student loans and Pell grants would also not be affected, The New York Times reported.

The pause was set to go into effect at 2 p.m. Pacific time, but a federal judge issued a temporary restraining order blocking it just minutes after 2 p.m. Tuesday. The judge will issue a permanent decision on Feb. 3, The New York Times reported.

On Tuesday, Snohomish County officials attempted to digest the news. County council’s finance team and the executive’s office team were in communication, officials said, trying to figure out what the impacts could be.

Grants and federal dollars are often used to supplement or match local programs and projects. They also often come in bits and pieces, meaning one project may have a history of years of piecemeal federal funding that takes time to track down.

“It’s really difficult to know, like, what the breadth of federal money nozzle stops flowing, what does that mean dollar wise,” county council member Jared Mead said. He added that it was something they were “paying close attention to,” and that county staff were trying to create a clear picture of just what is funded by federal dollars. There was no immediate impact from the pause on the county, Mead said.

“What are the implications? What can we expect to see delayed? For instance, what road projects, overlays, improvements could be at risk? There are absolutely going to be some,” Mead said. “It’s too early for us to know yet because we’re trying to figure out exactly what is reliant on federal dollars versus state versus local.”

Snohomish County’s annual budget is about $1.5 billion. Its general fund totals about $350 million. Federal and state grants account for portions of that, including “pass through” grants where the state acts as an intermediary between federal and local governments.

“Executive Somers and the team are awaiting more information and clarity as we work to understand the local impacts of the federal announcement,” the Snohomish County executive’s office spokesperson Kari Bray wrote in an email.

All agencies that provide federal assistance were to answer a number of questions by Feb. 7, a budget office memo read. The questions include the following, among others:

“Does this program provide funding that is implicated by the directive to end discriminatory programs, including illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates, policies, programs, preferences, and activities, under whatever name they appear, or other directives in the same EO, including those related to ‘environmental justice’ programs or ‘equity-related’ grants?”

“Does this program promote gender ideology?”

“Does this program promote or support in any way abortion or other related activities identified in the Hyde Amendment?”

Many impacts of the pause are still uncertain, the chief of the Washington State Hospital Association, Cassie Sauer, said in a media briefing Tuesday. Late Tuesday morning, the association received a memo from the federal government saying both Medicare and Medicaid will not be affected, despite some users reporting they are unable to use the online Medicaid portal.

Washington hospitals receive federal grants for projects such as opioid dependence prevention and improving maternal outcomes, Sauer said. Hospital employees may be unable to work if reimbursable programs like childcare are affected, she added.

“Hospitals may not be the recipients of some of this funding, but they have the possibility of receiving the spillover,” Sauer said.

Providence, which has several medical center locations across Snohomish County, is “carefully evaluating” the pause to understand what it means for patients, caregivers, physicians and communities, spokesperson Ed Boyle said in an email.

Community Transit will be “closely monitoring” the action, spokesperson Martin Munguia wrote in an email. As of now, however, there are no impacts to the regional transit agency’s service.

In Marysville, most federal grants paid to the city fund public infrastructure projects, spokesperson Connie Mennie said in an email. A total of 11 projects are partially or fully funded with federal grants, but the city does not expect them to be impacted by the executive order, she wrote.

Edmonds does not anticipate any interruptions to its daily operations or staffing as a result of the freeze, spokesperson Kelsey Foster said in an email. The city is most concerned about how city projects could be affected, she added.

Nathan MacDonald, spokesperson for the city of Lynnwood, said the freeze is “very new” and the city will have a clearer understanding of its impact in the coming weeks.

Edmonds College spokesperson Karen Magarelli said the college was not prepared to comment Tuesday, as it is still working to understand the directive. The Department of Health and Human Services is set to pay about $5.7 million to the college over the next year and a half for its Head Start early education program. Head Start was listed in a federal budget office document as one program which could see funding halted, but a document released by the White House said the program would not be affected.

The college also receives federal funding for some programs in partnership with local nonprofits, such as its Construction pre-Apprenticeship Program with Refugee & Immigrant Services Northwest. The program helps many immigrants secure a stable career, said Van Dinh-Kuno, director of the nonprofit.

“Now we put the training on hold,” she said. “They’ve been going through this program for months already, and I don’t think we need to add another trauma to their life.”

The Whidbey Community Foundation sent an email to local nonprofits Tuesday afternoon advising them to draw down any federal funds they currently have access to. The freeze could last 30 to 60 days, the email read.

“Essential programs addressing housing, food security, domestic violence prevention, and other critical needs could face disruption, threatening the well-being of individuals and families across Whidbey Island,” wrote executive director Jessie Gunn.

Washington Sen. Patty Murray, also chair of the Senate appropriations committee, released a statement alongside a ranking member of the House appropriations committee, Rose DeLauro, saying the spending freeze would cause “further disarray and inefficiency.” Murray later called the directive “illegal.”

“The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country,” the lawmakers wrote Tuesday in a letter to Vaeth. “We write today to urge you in the strongest possible terms to uphold the law and the Constitution and ensure all federal resources are delivered in accordance with the law.”

Washington joined 21 other states on Tuesday in suing the Trump administration over the federal funding pause, Attorney General Nick Brown announced.

This story has been updated to include the administration’s rescinding of the directive.

Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.

Jenna Peterson: 425-339-3486; jenna.peterson@heraldnet.com; X: @jennarpetersonn.

Jordan Hansen: 425-339-3046; jordan.hansen@heraldnet.com; X: @jordyhansen.