SAN DIEGO (KGTV) — A last-minute move by a federal judge halted a funding freeze ordered by the Trump administration, creating mass confusion across the country.
Organizations that receive federal aid are now scrambling to get clarification, while others are raising questions about the powers of the president.
“My initial reaction in all honesty was a lot of fear," said Teresa Smith.
It's an uncertain road ahead for Smith, the founder and CEO of Dreams for Change, a local nonprofit that helps provide safe sleeping and safe parking sites for the unhoused community.
During this time of year, the nonprofit relies heavily on federal funding to offer free tax help to those who qulalify through the IRS's Volunteer Income Tax Assistance (VITA), which has been around for more than 50 years.
Without that money, though, Smith said her tax program would almost cease to exist.
“So I’m running, through my mind, the scenarios," Smith said. "Do we close our sites this week, not knowing if we’re going to have money to reimburse all our cost?”
Across all county partners, Smith said her network helped file more than 23,000 tax returns last year. In most cases, she said people used the refunds to pay for rent, which indirectly addresses the issue of homelessness.
“If we start taking away these different little aspects that are preventing, such as this tax program, I don’t see how we can ever get out of these types of situations," Smith said.
Hers is not the only one at risk. Any program that benefits from federal assistance, like disaster relief, affordable housing and more, could lose that funding — about $3 trillion worth nationally.
Thad Kousser, a professor of political science at UC San Diego, said, “The freeze is really broadly applied so the Trump administration can, what they're saying is, look for certain areas that don't fit with their ideological viewpoint, and it's especially focused on DEI.”
Kousser said Trump has made it a point early in his second term to test the traditional checks and balances of American government. This specific move, he said, seems to violate the Impoundment Control Act of 1974 which essentially says any spending by Congress cannot be overridden by the president.
“So the question is what will emerge from that review? How broad will then the areas that they propose cutting funding be?" Kousser said. "Then, there'll be this constitutional question of do they have the authority to do this unilaterally without Congressional consent?"
Right before the freeze was about to take effect Tuesday, a federal judge blocked it, but only until next Monday. A hearing set for that morning could lead to an official decision from the court.
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