BETHLEHEM, Pa. — The city still is surveying the potential local impact of President Trump's administration putting a hold on federal spending this week.
With a federal judge blocking the funding freeze through at least 5 p.m. Monday, Feb. 3 — and hours before the news of Trump's budget office rescinding an order freezing spending on federal grants — Bethlehem officials met first thing Wednesday at Town Hall to assess what could come next for the city’s residents, nonprofit community, City Hall staff and constituents in other communities nearby.
Mayor J. William Reynolds said it’s currently unclear the exact financial impact on the city to come from the freeze, but officials estimate there’s been $43.4 million in federal funding awarded and contracted to the city to be spent over the next several years.
“This is an existential threat we have that’s going on in Washington, D.C."Bethlehem Mayor J. William Reynolds, on the federal funding freeze
“This is an existential threat we have that’s going on in Washington, D.C.,” Reynolds said.
He recommended locals share their thoughts with congressional representatives and organize among their neighbors.
The Monday memo from the White House's Office of Management and Budget led to confusion from the public and a number of lawsuits around the country.
The OMB rescinded the order, according to two people familiar with the matter who remained anonymous.
An array of community organizations nationwide, including schools, depend on trillions in federal dollars to provide necessary services.
The White House has been called upon by the public and lawmakers to better clarify what groups would explicitly be affected, but confusion ensued Wednesday.
Latest updates
In the aftermath of the funding freeze being rescinded, U.S. Congressman Ryan Mackenzie, who represents the Lehigh Valley and the state's 7th Congressional District, said he and his staff have been working with local groups that may have been affected by the OMB memo.
“This memo has now been rescinded by OMB, and if any issues persist as a result of the memo, please contact our office at 484-781-6000 so we can provide the proper assistance to everyone throughout the Greater Lehigh Valley," Mackenzie said in a prepared statement.
“This memo has now been rescinded by OMB, and if any issues persist as a result of the memo, please contact our office at 484-781-6000 so we can provide the proper assistance to everyone throughout the Greater Lehigh Valley."U.S. Congressman Ryan Mackenzie, PA-7
In a phone interview Wednesday afternoon, Reynolds said City Hall employees were finally once again able to access the grant database after being locked out for some time.
But he said he would hold any final judgement on the situation “until we have an ability to not just get into the portals, but to successfully utilize them and to have the contracts be honored in the coming days and weeks.”
“There’s just so much uncertainty and instability coming out of Washington right now,” Reynolds said.
“But hopefully this is a step in the right direction back to normalcy and honoring contracts.”
Order rescinded, concern remains
According to a fact sheet regarding Memorandum M-25-13, the freeze was “expressly limited to programs, projects and activities implicated by the President’s Executive Orders, such as ending [Diversity, Equity and Inclusion], the green new deal and funding nongovernmental organizations that undermine the national interest.”
"Any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process," the fact sheet from the Office of Management and Budget reads.
That means benefits such as Social Security, Medicare, Medicaid, SNAP, Pell grants and rental assistance, among others, would "continue without pause" under the order.
What appeared to be affected
According to the mayor and city staff, an early look at the situation shows what the freeze appeared to affect:
- The city police department — $500,000 to cover salaries of five police officers to serve Bethlehem Housing Authority properties; two Justice Assistance Grants through the Department of Justice to reimburse purchases of bulletproof vests
- The city Health Bureau — $8 million in federal funding appears to otherwise “remain in limbo.” The bureau director reportedly is locked out of the Lead and Healthy Homes program, Reynolds said, and local businesses involved in the work can’t be paid as of now
- The city’s reimbursement request that has not been processed regarding a land purchase that would later join the South Bethlehem Greenway and Saucon Rail Trail ($3.5 million in taxpayer money was used to buy the land, all while under a reimbursement contract with the federal government)
- A 2023 grant to spruce up safety along the Broad Street corridor that's currently frozen (Seven area schools are located along the corridor, and many students walk to class)
“We are losing the opportunity to work on the things that we have made promises about, that we talk about, that we take pride in,” Reynolds said.
“The people in this room and the people in this community have done too much over the past 20, 25, 30 years to recover from the close of Bethlehem Steel to have that progress be slowed or stopped.”
For now, the city and its constituents are “looking at all of the options” for next steps, Reynolds said, whether or not that includes legal action.
It appears at least 23 states have joined the legal fight against the funding freeze. Northeastern states among those include New York, New Jersey, Maryland, Delaware, Massachusetts, Connecticut, Vermont and Maine.
A deal's a deal, mayor says
Basic services through the city — think public works, parks and recreation, water and sewer departments — come through a mix of local, state and federal funding.
Most federal money is reimbursable, the mayor said, meaning the city takes out local taxes and makes contractual agreements with the federal government to get those funds back.
With that reimbursement, the city then can “fund programs, pave more roads, replace more pipes in the ground, build more parks — do all of those things that people want, no matter how much income you have, no what part of the city you live in,” Reynolds said.
Congress needs to “do their constitutional duty and not let the executive branch usurp their power.”Bethlehem Mayor J. William Reynolds
Congress needs to “do their constitutional duty and not let the executive branch usurp their power,” he said.
“We are not talking about future budgets or future priorities,” Reynolds said. “We are talking about budgets passed by Congress, that were signed into law by the president.
"That people in City Hall, that people sitting over here and sitting over here and sitting over here, that they have spent months and months and months [on].
“Because when you get that money, that’s not the end of it. You need to execute that grant agreement. You need to hire someone to go out and pave your road and clean your water and things like that.”
'Reassure the public'
As funds are halted for various equipment related to the work of the Bethlehem Police Department, Chief Michelle Kott said officials may have to “look at Plan Bs and Cs.”
“I just want to reassure the public — not only as the chief of police, but as a mother, as a wife — that we have your back, that we are going to continue regardless of what may be going on with this funding," Kott said.
"We are going to be out there fulfilling the promise that we made to the public to protect and serve with dignity and respect."Bethlehem Police Chief Michelle Kott, on the federal funding freeze
"That we are going to be out there fulfilling the promise that we made to the public to protect and serve with dignity and respect."
Kott said that at 4 p.m. yesterday, the city’s business manager for public safety was able to log onto the appropriate system to view respective grants.
Yesterday about 6 p.m., the business manager saw no grants listed.
“We cannot give up; we cannot retreat,” Reynolds said. “I said last week when we were honoring a lot of our nonprofits here and we were talking about some of the great work that we’re doing, it’s understandable right now that a lot of people are both exhausted and fired up.
“We don’t have time to be exhausted anymore.”
