Trump funding freeze sends Lehigh Valley nonprofits, local governments scrambling

EASTON, Pa. — Nonprofits and governments across the Lehigh Valley scrambled to react to a Trump administration hold on federal grant payments Tuesday before a D.C. judge granted a five-day reprieve.

“We’re a nervous wreck,” Lehigh County Executive Phil Armstrong said. “We have a lot of money earmarked for a lot of things that are on hold right now.”

Late Monday, the Trump administration issued a memo pausing payments of some federal grants, loans and other programs.

White House Press Secretary Karoline Leavitt indicated in a news conference Tuesday that the freeze does not apply “across the board” and only affects programs touched by recent executive orders.

Still, it remained unclear exactly which programs could count on funding, stoking fears that critical sources of support could be cut off.

Nonprofit impacts

Government and nonprofit leaders warned that a sweeping freeze could create gaping budget holes for the programs they oversee. The shortfall could force them to reduce or eliminate services that residents depend on, including food aid, housing support and education programs.

Later in the day Tuesday, a Washington, D.C., federal judge issued an order that will keep the grant money flowing until Monday in response to a lawsuit from the nonprofit group Democracy Forward.

“This uncertainty can place additional strain on our staff and our resources,” said Dawn Godshall, executive director of Community Action Lehigh Valley.

CALV receives about half its funding from the federal government.

“It's a really big period of financial instability as we wait to find out what the results of all of this will be, so we're just in a holding pattern for now,” she said.

The uncertainty yielded some immediate impacts. Second Harvest Food Bank suspended some food purchases Tuesday because they weren't sure federal reimbursements would follow.

Meanwhile, leadership of Easton-based Third Street Alliance scrambled to make contingency plans in case money earmarked to help low-income households pay their rent does not come through.

“We're supposed to be paying rental assistance for February 1, so we've got to figure out what we're going to do,” said Alisa Baratta, the group’s executive director.

If reimbursement for the assistant payments is not coming, Third Street Alliance will need to work out whether it can take the financial hit on its own, she said.

Local leaders raise alarms

Lehigh Valley government officials, too, said they are alarmed about how a broad funding freeze could affect their constituents.

“It doesn't matter what your political affiliation is, if you live in the city of Bethlehem, you should be very, very concerned about this executive order,” said Mayor J. William Reynolds.

“It has potentially frozen somewhere between $30-40 million of federal dollars that have been allocated to keep our citizens safe and provide many basic city services."

Reynolds plans to address the order in a news conference at Bethlehem City Hall Wednesday morning.

Lehigh County Executive Phil Armstrong said the order potentially has serious consequences on a host of local programs, including drug and alcohol treatment centers, expansion of the Cedarbrook nursing home and mental health programs.

The Lehigh County Board of Commissioners is also in the midst of approving a $1 million grant for a job training program to Marcon Enterprise's new operation at the renovated Allentown Metal Works property.

But that funding comes from the American Rescue Plan, which Armstrong believed is affected by the order.

Northampton County’s single largest source of federal funding — Medicare and Medicaid reimbursements for residents of Gracedale nursing home — remained usable throughout the day Tuesday, a county spokesperson said.

But, depending on what shape the freeze ultimately takes, impacts could sweep “from emergency management and 911 right to the Department of Community and Economic Development, where we help fund so many social services,” said Northampton County Executive Lamont McClure.

If the money were to disappear, “the bottom line is, we won't be able to provide those services,” McClure said.

The communications director for U.S. Rep. Ryan Mackenzie, Arnaud Armstrong, said the new congressman has been in contact with local officials, including Allentown Mayor Matt Tuerk and Bethlehem's Mayor Reynolds, over Trump's executive order.

Armstrong declined an interview request but said in a prepared statement that Mackenzie, R-Lehigh Valley, has reached out to the White House seeking clarifying information about the funding freeze; the office is still waiting for a response.

"Congressman Mackenzie also expressed his desire for the continuation of funding that has already been approved and is of importance to the Greater Lehigh Valley," he said.