A legal whirlwind briefly blew through Seward County last week around the Trump Administration’s efforts to “pause” some federal financial assistance programs and a 21-state legal challenge to that executive order.
The lawsuit challenged the legality of the Office of Management and Budget (OMB) memorandum M025013 that sought to immediately pause agency grant, loan, and other financial assistance programs. Nebraska is not among the states filing suit.
John J. McConnell, Jr., chief judge of the U.S. District Court for the District of Rhode Island, on Jan. 31 placed a temporary restraining order on the president’s directive until court action, although Trump had already pulled the executive order.
The judge’s document said factors considered in the restraining order were the freeze’s likelihood of success on merit, the one-day notice for the spending actions, their impact on the public interest, and the “contrary nature” of the action based on the Congress’s role in funding action and intent.
But budget cutting and identification of possible waste, misuse, or fraud remain part of the administration’s agenda and the newly created Department of Government Efficiency (DOGE) being led by Elon Musk. Whether another broad funding “pause” will be renewed is unknown.
Nebraska Congressman Mike Flood, when asked for comment on the issue, emailed a statement to the Seward County Independent. He spoke favorably about Trump’s federal spending actions, saying the new administration is “vulnerable” now as “grantees are taking advantage of the newness of the leadership change.”
“This will sort itself out in days, and it will end up being incredibly popular because people worried about federal spending have been asking for this for years,” Flood’s statement said.
Seward County administrators who deal with federal funding said a lot of questions were being asked about how they may be impacted after the initial executive order was announced. While that died down within days or even hours, debates about possible federal funding cuts are being monitored.
“Be wary and aware,” Seward City Administrator Greg Butcher said when asked what entities utilizing federal funding for projects need to do.
The City of Seward has no projects in the works for which federal funding changes could have an immediate impact. But future Trump Administration cuts could cause delays or changes in funding.
The city anticipates federal support for a portion of the $32 million cost of the wastewater treatment plant it hopes to put out for bids next fall. But Butcher said his state government contacts do not think funding for such projects is targeted.
“No one has sent up any red flags for us,” Butcher said.
Much of the federal funding for city- and county-level projects is handled through grants to state programs, he said. Local governments then apply for funding from those programs.
For example, the program for Creative Districts like the one recently designated in Seward is funded through the Nebraska Arts Council’s federal grants. Again, there is no specific information about potential cuts at the time this was written.
Seward County Commissioners had the payment freeze and court order on their discussion agenda Feb. 4.
Board Chair Misty Ahmic said they had been emailed a copy of the restraining order and sought information from the county attorney’s office. Like the city, most of the county’s federal aid comes through state programs, mostly for road and bridge funds.
The drug interdiction money confiscated in potential trafficking stops goes to federal accounts in the Seward County Sheriff’s Department program that coordinates with the Departments of Justice and Treasury. The county department then receives a portion of that money back from the federal fund, which could be impacted by a broad spending freeze, she said.
“Right now, this is not affecting us,” Ahmic said last week. “We will have to see how it plays out.”
Concordia University Nebraska and Southeast Community College had immediate questions about student loans and Pell grants when the news came out. But they later learned those transactions were excluded from the executive order.
CUNE Executive Vice President and Chief Financial Officer Dave Kumm said their auditing firm alerted them to the executive order and noted few details were initially available about its impact on student loans and grants.
Because it is early in the spring semester, Concordia had not yet withdrawn loan funds from federal accounts, but Kumm said they hurried to make sure the university had the student’ financing approved and expected by the students in its account.
The thought of students’ education funding being delayed or curtailed at this point in the school year inspired a short-time panic, he said.
“That would highly damage every single student and every educational institution without a multi-year plan,” Kumm said. “If they did something like that, it changes the whole make up of higher education.”
The early news about the budget directive was not clear, he said, and though the Trump Administration may not have intended to include student loans and grants, the communication was lacking.
Southeast Community College Director of Marketing and Communication Seth Meranda said the order was “something we looked into fairly quickly to try to understand.”
“We continue to watch that. There are few details that come out with these things,” Meranda said.
Seward Schools Superintendent Josh Fields said the Seward district did not receive any notice that it could be denied any federal funding, though all federal support is allocated through the Nebraska Department of Education.
Fields said federal funding targets the hot lunch program and special education programs across Nebraska. Districts submit their expenditures to the state for reimbursement and the state, in turn, seeks reimbursement from the U.S. Department of Education.
He said the state education commissioner and others communicated with district superintendents about the recent freeze situation.
“Nothing has been cut for schools,” Fields said.
Some programs within special education are deemed title programs, like Title 1 that works to close educational achievement gaps based on the number of students who qualify for free and reduced-price lunch. Federal support for title programs supplement state and local funding instead of reimbursing it.
The 21 states seeking the restraining order in the U.S. District Court for the District of Rhode Island included New York, California, Illinois, Rhode Island, Massachusetts, Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, North Carolina, New Mexico, Oregon, Vermont, Washington and Wisconsin, plus the District of Columbia.
In addition to the president, the suit named the OMB, the Departments of Treasury, Health and Human Services, Education, Transportation, Labor, Energy, Homeland Security, and Justice, as well as the Federal Emergency Management Agency, Environmental Protection Agency, and National Science Foundation. Confirmed and acting directors or secretaries were also named individually.
McConnell’s order identified four factors weighed in the decision to grant the restraining order: the likelihood of success on merit, the potential for irreparable injury, balance of relevant equities, and the decision’s effect on the public interest.
The document said he considered the unilateral nature of Trump’s action, the contrary nature of the order compared to the congressional funding action and intent, the 24-hour notice given for the memo’s directives, and a violation of the separation of government powers.
It also noted that because the federal funds support state programs including highway planning, construction, childcare, veteran nursing care, special education, and health departments, the withholding of funds could disrupt the administration of vital services.
In their suit, the states asserted the funding pause could disrupt FEMA’s current assistance to North Carolina and California.
