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After the Trump administration last week announced it would pause trillions of dollars in payments to federal grant and loan programs — sparking lawsuits and mass confusion — environmental and clean energy groups warn such a move could harm those bearing the brunt of climate change and threaten Michigan’s burgeoning clean energy industry.
From federal support for heating assistance, clean water and disaster relief to funding for renewable energy and environmental justice efforts, Trump’s spending freeze could place several government programs in jeopardy as federal agencies scrutinize their spending to ensure it falls in line with the president’s priorities.
“Given what has happened in the last 24 to 36 hours, everything that the federal government has supported, essential programs that date decades and decades back, are now in harm’s way,” Courtney Brady, Midwest deputy director for the climate action organization Evergreen Action told the Michigan Advance on Wednesday, the day after the freeze was announced.
Although the Trump administration has since rescinded the memo issuing the pause, White House press secretary Karoline Leavitt later wrote in a social media post that the rescission of the memo was “NOT a rescission of the federal funding freeze,” creating further confusion.
Where legal challenges stand
After the Office of Management and Budget (OMB) last week issued a two-page memo freezing payments for multiple federal programs, legal challenges were quickly filed.
Second federal judge issues temporary order blocking Trump spending freeze
With multiple organizations that receive federal funding filing a case against the OMB, District Judge Loren L. AliKhan issued a stay on the funding freeze which was set to expire at 5 p.m. Monday. AliKhan came back on Monday and granted a temporary restraining order.
“Defendants’ actions in this case potentially run roughshod over a ‘bulwark of the Constitution’ by interfering with Congress’s appropriation of federal funds,” AliKhan wrote in the 30-page ruling.
Another judge issued already a restraining order on the spending freeze Friday in a case brought by 23 attorneys general, including Michigan’s Dana Nessel. In his ruling, Chief Judge John J. McConnell Jr. of the U.S. District Court in Rhode Island wrote that the administration’s “actions violate the Constitution and statutes of the United States.”
“Federal law specifies how the Executive should act if it believes that appropriations are inconsistent with the President’s priorities — it must ask Congress, not act unilaterally. The Impoundment Control Act of 1974 specifies that the President may ask that Congress rescind appropriated funds. Here, there is no evidence that the Executive has followed the law by notifying Congress and thereby effectuating a potentially legally permitted so-called ‘pause,’” McConnell wrote.
An attorney for the U.S. Justice Department had argued during a virtual hearing before McConnell on Wednesday that the case was no longer necessary since OMB rescinded the original memo.
McConnell’s temporary restraining order will stay in place until he rules on an upcoming request from the Democratic state attorneys general for a preliminary injunction.
Broad impacts across climate and disaster programs
As the cases play out in court, environmental groups are grappling with what the Trump administration’s proposed spending freeze — and other possible measures like tariffs — could mean for people in Michigan and across the country.
While the White House has made assurances that the spending freeze would not impact programs like Social Security, Medicare, Medicaid and direct food assistance programs like the Supplemental Nutrition Assistance Program (SNAP), the freeze would apply to a wide swath of government programs as the Trump administration reviews their spending.
The initial memo states: “Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again.”
When looking at the immediate impacts of the funding freeze on climate and energy efforts, Brady pointed to the government’s Low-Income Home Energy Assistance Program (LIHEAP) as a prime concern.
“It’s freezing across the country right now and people are relying on this funding to keep their heat on so they don’t have to use their stoves in a very dangerous way to heat their homes. And you know, states may have the inability to roll out that funding right now because of this very unclear freeze from the Trump administration,” Brady told the Michigan Advance on Wednesday.
Frigid temperatures gripped large swaths of the country throughout January, with states in the southern United states facing a historic snowstorm, bringing record breaking cold temperatures to Louisiana with the National Oceanic and Atmospheric Administration (NOAA) recording 10 or more inches of snow in locations in Louisiana, Mississippi, Alabama and Florida on Jan. 21 and 22.
Additionally, the funding pause could carry concerns for disaster relief through the Federal Emergency Management Agency (FEMA), Brady said, pointing to the California wildfires and damage from Hurricane Helene in North Carolina.
“States are using that FEMA funding all the time because of the amount of extreme weather events we’re seeing. So things like flooding, home repairs, infrastructure repairs that come from things like storms that we might not, you know, hear in the national news, but communities are relying on this funding every day to stay safe,” Brady said.
Federal funding is also essential for supporting clean drinking water and water infrastructure, Brady said, with a funding freeze putting a halt to these programs and jeopardizing clean water.
Uncertainty for clean energy and electric vehicle manufacturing
Since former President Joe Biden signed the Bipartisan Infrastructure Law and the Inflation Reduction Act into law, Michigan has established itself as a leader in clean energy manufacturing, securing the largest number of projects in the nation alongside more than 26,000 jobs, and $27.84 billion in investment into efforts like battery manufacturing sites, solar and wind manufacturing plants, and new or expanded facilities for building electric vehicles.
Last year, Gov. Gretchen Whitmer announced a program through the Department of Environment, Great Lakes and Energy (EGLE) and the Michigan Economic Development Corp. (MEDC) to connect clean energy projects to federal funds. Clean energy funding was also crucial in supporting the launch of the Department of Labor and Economic Opportunity’s (LEO) Community and Worker Economic Transition Office, which aims to help communities and manufacturers retain jobs as energy producers and manufacturers shift away from fossil fuel products to working with renewable energy.
Through its ‘Make it in Michigan’ Competitiveness Fund, the state has invested $191 million, leveraging over $1 billion in federal funds for infrastructure, mobility and electrification, climate and the environment, economic development, health, and public safety.
The Department of Environment, Great Lakes and Energy (EGLE) also offers state and federal funding for various energy related projects, such as energy efficiency upgrades and renewable energy installations in non-residential zones, clean technology development, electric vehicle charger installations and funding for research and reports.
However, Brady warned that these programs could be threatened by the Trump administration, with Politico confirming the Trump administration is continuing to target clean energy spending from the Inflation Reduction Act and Bipartisan Infrastructure Law.
When the Michigan Advance asked LEO whether the department or any of its programs had faced concerns or issues resulting from the announcement of the funding freeze, the department deferred to the State Budget Office. A further inquiry to the budget office on the status of climate, energy and heating assistance programs across the state’s multiple departments was not answered prior to publication.
Laura Sherman, president of the Michigan Energy Innovation Business Council, a trade association of clean energy businesses, said anyone who works with businesses knows that they like certainty.
“Uncertainty does not create a strong business environment in general. And I think that this pause in federal funding, it’s not just clean energy. Across the country, in all different industries, agencies, nonprofits, businesses, everything has created a lot of uncertainty,” Sherman said.
“I have heard over the last week from a number of our members who have contracts or grants from local governments, from the state, from different departments that they’ve gotten notices that those payments, those projects, are being put on hold because it’s not clear what’s going to happen,” Sherman said.
While those projects will hopefully continue, even short term uncertainty makes it hard for companies to hire, and keep promises to their suppliers, having a ripple effect all the way down the supply chain, Sherman said.
Additionally, the announcement of 25% tariffs on goods from Canada and Mexico, alongside a 10% tariff on Canadian energy resources has only contributed to that uncertainty, said Justin Carpenter, the Michigan Energy Innovation Business Council’s director of policy.
“This morning we had a tariff, a 25% tariff on Mexico as well. And then, you know, a couple hours later, that gets rescinded. None of that is super beneficial to a positive environment for industry,” Carpenter said.
As of Monday evening, the tariffs against both nations had been paused for 30 days, likely creating even further uncertainty in the short term.
Hiring and expansion is similarly difficult, he noted, even for companies who switch to using domestic goods.
“Obviously the reason you haven’t been using [the domestic good] is because it’s inherently more expensive. But as more companies do that substitution, then there’s a more captive market and higher demand for that domestic good, and those prices can actually go up even from where they were,” Carpenter said.
Canadian Prime Minister Justin Trudeau said the nation is also considering non-tariff measures, potentially relating to critical minerals, energy procurement and other partnerships, Reuters reported.
Although there’s a desire from many people — including the current administration — to build more things in the U.S., there is a global market if we don’t support our companies in creating jobs and building those products here, Sherman said.
“Our automakers want to sell to the global customers. They want to sell — not just in Michigan — they want to sell across the country. They want to sell to other countries. And if we’re not supporting our manufacturing, we’re not supporting those companies and providing the right long term signals to them to do it here, we’re simply going to lose out to places like China,” Sherman said.
Michigan has done a lot of work tying climate mitigation and clean energy to economic development in an effort to diversify the state economy, Brady said. However, without federal support, these efforts come into question, she said.
Additionally, this support goes beyond supporting clean energy projects, supporting the infrastructure needed for these efforts to move forward.
“Things as simple as road repairs, broadband expansion, those things that are like, the backbone of what makes a successful economy all rely on federal support and federal programs,” Brady said.
While the Trump administration has pledged to “unleash American energy” its efforts thus far have focused on supporting oil and natural gas production while halting efforts to produce renewable energy on federal land.
The United States is leading the world in oil production, according to a 2024 report from the U.S. Energy Information Administration, with the country producing more than any nation at any time for the past six years.
Sherman also noted that renewables are the cheapest form of energy generation.
A 2024 report from the International Renewable Energy Association found that 81% of new large-scale renewable energy projects produced cheaper electricity costs than fossil fuel sources.
“The potential loss of federal support only hurts us, only hurts American manufacturing and helps other countries. And so I think that’s the wrong policy direction that’s actually undermining the stated goals of the folks who are making those decisions,” Sherman said.
Similarly, the 10% tariff on Canadian energy resources — which includes oil, natural gas, electricity, coal, uranium and critical minerals needed to produce energy technologies — hurts more than it helps, Carpenter said.
Even if the tariff encourages more domestic production of critical minerals and is coupled with efforts to cut red tape to site mines, mining companies will still be buying vehicles that may be more expensive, and will be extracting the minerals using field that is now more expensive, Carpenter said.
“It just does not pencil out in the long run. It’s one of those situations where there has to be carrot with the stick. And currently there’s no, there’s no carrot,” he said.
Resilience in spite of attacks on funding
Adding to the uncertainty across the board, the looming federal funding freeze has generated concerns around Michigan’s Justice 40 Accelerator, Chris Gilmer-Hill, policy associate for the Michigan Environmental Justice Coalition told the Michigan Advance on Friday.
In line with Biden’s Justice 40 initiative, which requests at least 40% of funds from the Bipartisan Infrastructure Law and Inflation Reduction Act be used to support communities that are overburdened by pollution or facing underinvestment, Michigan’s Justice 40 accelerator aims to connect community-based organizations with federal funding to support environmental justice projects
These projects offer clear benefits to communities that are particularly vulnerable to the impacts of climate changes and pollution, Gilmer-Hill said, making that loss of funding directly harmful.
While there are other opportunities for funding and many environmental justice organizations will survive, a lack of funding, even just a temporary pause, and a lack of new programs centered on environmental justice will have an immediate impact on people’s health, Gilmer-Hill said.
Reading through materials put out by the Trump administration, particularly his executive orders, Gilmer-Hill said the administration seems to have to latched on to environmental justice in the same way it has latched onto phrases like “DEI” — which stands for diversity, equity and inclusion — and “woke.”
“From our perspective, it’s all this very superficial, just, attack. But specifically in the context of environmental justice, I mean, it has that very direct, real-world impact,” he said.
“The goal of this funding freeze seems to be sort of eliminating what they see as DEI grants, and obviously Black and brown communities are likely to be, you know [environmental justice] communities, likely to be disproportionately impacted,” Gilmer-Hill said. “And the unfortunate but … seemingly very likely end result is going to be essentially the administration targeting and really just discriminatorily removing funding from those communities.”
While it’s likely this kind of action will be litigated, communities of color facing environmental injustice will be hurt the most, even by a temporary pause, Gilmer-Hill said.
Although Michigan doesn’t face the absolute worst natural disasters, its most vulnerable communities still rely on federal disaster relief when there are disastrous conditions, Gilmer-Hill said, pointing to frequent flooding in Southeast Michigan due to severe storms as one example.
However, given its roots in community organizing, the environmental justice movement will be resilient, if not supercharged, Gilmer-Hill said.
“If even a small handful of folks are really energized to organize against what’s happening, that is not only going to meaningfully blunt the impact of these attacks, but it’ll be building real infrastructure for long-term progress on environmental justice. Like the way that we get to where we’re going is organizing communities and making specific demands that get implemented. That work can still happen no matter what happens with federal funding,” he said.
This report featured reporting from States Newsroom Senior Reporter Jennifer Shutt.
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