Update: The White House budget office has rescinded an order that would have temporarily halted federal financial assistance. Federal agencies were notified of the reversal Wednesday.

Government and nonprofit agencies in Hawaiʻi were working Tuesday to assess the implications of a White House order to temporarily halt disbursements of federal financial assistance.

The directive from the Office of Management and Budget was scheduled to go into effect at noon Hawaiʻi time but was put on hold until Feb. 3 after legal intervention by a coalition including the American Public Health Association and the National Council of Nonprofits.

In a press release Tuesday afternoon, Gov. Josh Green voiced support for the injunction and said Attorney General Anne Lopez had joined AGs from Democratic states in challenging the federal action on constitutional grounds.

Green said the Trump administration’s sweeping order, issued Monday, had caused “chaos, confusion and uncertainty,” and Hawaiʻi officials were “currently assessing the impact of this pause on essential state programs and services, including education, health care, social services, and wildfire recovery.”

He said that the state would establish alternative plans as necessary to continue essential services if they are threatened. 

The White House memo to federal agencies ordered a pause to “all Federal financial assistance” and specifically identified payments to nongovernmental organizations and programs that support alternative energy and diversity and inclusion. 

The language of the original memo was so broad that the administration issued a clarification Tuesday saying benefits to individuals, such as Social Security, Medicaid and SNAP, would not be affected.

Federal websites for Medicaid and the U.S. Department of Housing and Urban Development, which supports emergency housing, were reported to be out of service on Hawaiʻi, as well as on the mainland, according to Aloha United Way CEO Michelle Bartel. “We’re being told that payment portals are down,” she said. 

The White House acknowledged outages but said direct payments would not be affected.

Federal Assistance Was Low Before Wildfires

Federal funds made up a little over 25% of the state’s revenue in the 2022 fiscal year, according to the U.S. Census Bureau — the second lowest in the nation after North Dakota. 

But that was before the injection of funding under the Inflation Reduction Act, the Infrastructure Investment and Jobs Act and support for Maui wildfire recovery. A full tally of federal assistance to Hawaiʻi was not immediately available Tuesday. The state Office of Federal Awards Management referred questions to the governor’s office, which said it is working to provide the data. 

Among the questions sparked by Tuesday’s spending freeze was how it might impact rebuilding in Lahaina; the Maui County Office of Recovery was still assessing that.  

State agencies including the Department of Transportation, Department of Law Enforcement and the Department of Budget and Finance said Tuesday they were clarifying the details of the programs that could be affected by the spending freeze if it takes effect on Feb. 3.  

Department of Labor and Industrial Relations director Jade Butay said that “a significant portion of our operations” would be disrupted, including unemployment insurance, job training and workplace safety programs under the Occupational Health and Safety Act. 

The state Department of Defense relies on $88 million of federal funding for general operations including the National Guard and the state Emergency Management Agency. But Hawaiʻi National Guard Maj. Gen. Stephen Logan said that there would be no immediate impacts from a temporary freeze.  

More vulnerable are public art initiatives and some projects of the Hawaiʻi State Archives funded by federal grants, according to state Comptroller Keith Regan.

Melissa Miyashiro, executive director of the Hawaiʻi Alliance of Nonprofit Organizations, said her group was surveying its members to assess which organizations are most vulnerable and would convene a virtual town hall later this week to update them. 

Bartel, with Aloha United Way, said some nonprofits wouldn’t be able to weather even a brief pause in federal funds. “They just don’t have the resources,” she said.

Federal funding has been disrupted before during government shutdowns, she said, and United Way would look at “bridge loans and maybe some emergency funding for our nonprofit partners, so that there is as little disruption in vital services for the community as possible.”

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.