Local organizations feel immediate impact of federal funding freeze

As executive orders from the Trump administration continue to roll out, a memo from the Office of Management and Budget (OMB) issued Monday night has ordered a freeze on all federal aid. The move halts grants and loans issued by the federal government, potentially crippling programs relied upon by millions across the country—including those here in Forsyth County.

In the two-page memo obtained by The Chronicle, Matthew Vaeth, acting director of OMB, directed all federal agencies to conduct a comprehensive review of programs, projects, and activities affected by Trump’s executive orders. “The executive orders, including but not limited to financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the Green New Deal,” Vaeth wrote.

“This temporary pause will provide the administration time to review agency programs and determine the best uses of the funding consistent with the law and the president’s priorities.”

According to the OMB, in 2024 the federal government spent more than $3 trillion on financial assistance programs. While Social Security and Medicare remain unaffected, the pause has implications on school lunch and breakfast programs, Section 8 rental assistance, TANF (Temporary Assistance for Needy Families), Title I education grants, Head Start, and more.

The freeze, originally set to take effect at 5 p.m. on Tuesday, Jan. 28, immediately sparked confusion and concern among local agencies scrambling to understand the implications. However, in a late development Tuesday evening, a federal judge temporarily blocked the freeze, calling it “an overreach of executive authority with far-reaching consequences.”

“The executive branch does not have unilateral authority to withhold funds appropriated by Congress,” the judge wrote in the ruling, according to The Associated Press. “This freeze would cause irreparable harm to families, schools, and communities that rely on these programs for survival.”

Despite the temporary block, the ruling has not alleviated the uncertainty, as agencies remain locked out of federal systems and unsure when—or if—funding will be restored.

Local Agencies Scramble for Answers

Kevin Cheshire, executive director of the Housing Authority of Winston-Salem (HAWS), said the effects were immediate even before the freeze officially took effect.

“Even though the memo said it would be effective at 5 o’clock, we were locked out of our system hours before,” he told The Chronicle around 2 p.m. on Jan. 28.

Cheshire said HAWS has some cash reserves, but federal dollars are essential for paying landlords on behalf of low- to moderate-income families. “We don’t have enough to cover rent payments past next month,” he warned.

“We’re still trying to get more information. I have a meeting with HUD later today, but unless something changes to reopen these systems, our agency won’t be able to operate very long—and when I say ‘not very long,’ I mean weeks, not months…We have to keep moving forward, but right now, we don’t know what that looks like.”

Healthcare providers were also affected. Before 5 p.m., Novant Health Forsyth Medical Center and Atrium Health Wake Forest Baptist Medical Center reported that the Medicaid portal was down.

Nonprofits Brace for Impact

Michele Speas, chief operating officer of Family Services and executive director of the Family Services Foundation, said the freeze has caused widespread confusion. Federal funding supports critical programs at Family Services, including its domestic violence initiatives and Head Start/Early Head Start, which provides childcare for many Forsyth County families.

To prepare for potential disruptions, Speas said the organization will conduct “scenario planning” to find ways to keep programs running.

“Family Services is celebrating its 120th anniversary this year, and we’ve weathered unstable funding situations before,” she said. “It’s not pleasant work, but we are confident we’ll find a way to continue serving the community—just as we have since 1905.”

Speas compared the uncertainty to the early days of the COVID-19 pandemic. “When we sent employees home in March 2020, we didn’t know what the future held. We had to make changes, but we pushed through. That’s our plan now.”

She assured the community that Family Services remains committed. “Our pledge is to continue delivering programs and services. Our community is strong, and we will take care of each other.”

Calls for Action

Shortly before the freeze took effect, Alexandre Sirota, executive director of the NC Budget & Tax Center, condemned the action as unlawful, urging policymakers to push back against Trump’s decision.

“Beyond the lack of clarity, the sweeping nature of this action is a blow to a key principle of democracy—our public money should reflect the priorities of the people, debated through a transparent and inclusive process, not dictated by one person’s will,” Sirota wrote in a statement.

“This federal funding freeze disregards the real priorities of North Carolinians, who want more affordable childcare and housing—not uncertainty in their daily lives.”

What’s Next?

While the judge’s ruling provides temporary relief, the long-term outcome remains uncertain. Agencies must still submit detailed reports on impacted programs by Feb. 10, and there is no clear timeline for when funding will be restored.

This is a developing story. Updates will follow as more information becomes available.