A sudden freeze on federal spending by the Trump administration — set to take effect Tuesday — sent Colorado officials scrambling as they tried to figure out the extent and impact of the decision.
Much of Colorado’s $40 billion state budget as well as its hospitals, universities, early childhood programs, research laboratories, and other agencies and groups rely on federal funding for day-to-day operations. It wasn’t immediately clear how President Donald Trump’s freeze, set to take effect at 3 p.m. Mountain time, would ripple through the state or affect residents’ access to services.
State lawmakers said they were trying to determine if the order, which came in the form of a budget memo sent to federal agencies on Monday, would apply to Medicaid, which provides health care to nearly a quarter of Coloradans. But the directive did appear to cover Pell grants, housing vouchers, and such disparate programs as Medicaid fraud prevention and gun safety services.
Regular funding for Denver Health and federally qualified health centers, which are the safety net health care providers across the state, also appeared to be in jeopardy. A spokeswoman for Denver Health said the agency was still working to understand the impacts Tuesday morning.
“I think the impact to people’s lives will be catastrophic,” Rep. Shannon Bird, a Westminster Democrat who sits on the legislature’s powerful Joint Budget Committee, said Tuesday morning. “It’s chaos.”
The budget memo requires all federal agencies “to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.” Out of nearly $10 trillion identified in federal spending in the last fiscal year, it said nearly $3 trillion went to federal assistance.
The memo says assistance should be focused on things like manufacturing, government efficiency and “ending ‘wokeness.’ ” The memo goes on to attack “Marxist equity, transgenderism and green new deal social engineering policies” as a “waste of taxpayer dollars.”
Several states quickly announced plans to sue the federal government over the pause, and a suit may come as early as late Tuesday morning. New York Attorney General Letitia James called the spending freeze unconstitutional.
The executive branch is obligated to spend funds passed by Congress. A 1974 law, the Impoundment Control Act, gives Congress oversight of what the executive branch may delay spending on. Withholding congressionally authorized spending was a key reason for Trump’s first impeachment during his first term.
A spokesperson for Gov. Jared Polis said the office was still looking into the issue. Jack Stelzner, a spokesman for U.S. Rep. Diana DeGette, said the Denver congresswoman’s office had been inundated with calls from constituents about what the order meant. Grace Martinez, a spokeswoman for U.S. Rep. Joe Neguse, said his office was trying to pull together a list of impacts in northern Colorado. Both are Democrats.
“What does this mean for Colorado? Funding to our police departments, our rural hospitals, programs for homeless veterans. Nearly 9,000 kids in CO Head Start programs may be locked out,” U.S. Sen. John Hickenlooper, a Democrat, said on X. “Trump is sacrificing working Americans.”
Representatives for Colorado’s Republican members of Congress — Lauren Boebert, Jeff Crank, Gabe Evans and Jeff Hurd — did not immediately return requests for comment.
Members of the state legislature’s budget committee were likewise trying to make sense of the decision, and legislative leaders were also scrambling to pull together a list of impacted programs.
Sen. Jeff Bridges, a Greenwood Village Democrat and chair of the budget committee, called it a “very early, quickly written memo that has broad and far reaching consequences.” It comes as the state is grappling with its own budget shortfall of up to $1 billion, which adds up to “potentially extremely painful cuts” to state services, he said.
Of the president’s action, he said: “There certainly were blusterings, and maybe even tweets, but I did not expect it to culminate in a memo like this so quickly, and with a complete and total lack of any kind of notice.”
“We’re completely locked out”
The impact of the freeze is already being felt in the state.
The Colorado Coalition for the Homeless, which provides health care and housing for homeless Coloradans, cannot access its regular funding streams that help cover rent for hundreds of people and provide health care for thousands more. Federal funding also helps support the coalition’s staffing.
“We’re completely locked out,” said Cathy Alderman, a spokesperson for the coalition, calling the Trump administration’s move “thoughtless.” “Which means, if that’s not resolved, we’re not going to be able to pay people’s rents next week, which might mean they’re subject to eviction. And it’s hundreds of people.”
Bird and Rep. Emily Sirota, a Denver Democrat who also sits on the Joint Budget Committee, both said money to Medicaid had been shut off Tuesday morning. Marc Williams, spokesman for the state’s Medicaid authority, said he was checking the veracity of that report.
“What appears to have happened is something very reckless,” Bird said. “Actions (were) taken in complete reckless disregard for the people of Colorado.”
This is a developing story that will be updated.
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