The Trump Administration’s Federal Funding Freeze Signals a Broader Attack on Economic Security

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February 4, 2025

Editor’s note: The statement below was originally published on Georgetown Center on Poverty and Inequality website.

In its first week, the Trump administration executed a chaotic and aggressive policy blitz, issuing more than 300 executive actions. These actions signal a stark shift in federal priorities—one that threatens to erode the economic security of millions of Americans. What message can Americans take away from confirmation hearings, executive orders, and agency memos?

The message is loud and clear: The war against poverty is over, and Americans struggling to get by are on their own.

Take Russell Vought, Trump’s nominee to lead the Office of Management and Budget. At a confirmation hearing, Vought praised the 1996 welfare reform law as a success. In reality, that legislation drastically cut cash assistance for families in poverty–as predicted by one of us at the time (Peter Edelman). In 1996, 68 out of every 100 families living in poverty received support from Temporary Assistance for Needy Families (TANF). By 2020, that number had plummeted to just 21. In Mississippi, the maximum TANF benefit doesn’t even cover a quarter of the median rent—let alone diapers, food, or other essentials. Despite overwhelming evidence that the welfare law deepened poverty, Vought says he’s “proud” of this law.

But this Administration’s attacks on economic security do not stop there. Shortly after visiting disaster-stricken areas in North Carolina and California, President Trump suggested eliminating the Federal Emergency Management Agency (FEMA), a crucial disaster recovery program. FEMA helps families who have lost their homes, cars, and livelihoods rebuild their lives. Without FEMA, more Americans would be pushed into poverty, unable to recover from emergencies beyond their control.

Then, late Monday night, the Trump administration suddenly announced a freeze on federal loans and grants. The move was reckless and widely condemned. The hasty, haphazard follow-up guidance, rescindments, and social media clarifications did little to help ease alarm among state and local governments, rural hospitals, schools, nutrition programs for children, research laboratories, nursing homes, and other service providers that rely on federal funds in order to maintain operations.

This isn’t just bureaucratic mismanagement—it’s a deliberate strategy. The Trump Administration’s approach is to gut federal programs through funding freezes, agency dysfunction, and legislative neglect, making it harder for working families to access the support they need. The ripple effects extend far beyond poverty fighting social services: funding for cancer research, higher education, and community health programs are all under threat. Policy experts and advocates are racing to track these changes and mitigate their impact, but responding to Trump’s chaos-first approach requires diverting important resources from supporting families and communities right now and developing longer-term solutions that would create an economy that works for everyone.

An America without poverty is possible. As the wealthiest nation on Earth, we possess the resources necessary to ensure opportunities for everyone. But we need courage and leadership. Our leaders must recognize and prioritize economic security. The American dream is built on the idea that hard work can lead to stability and success, but that promise is under attack. Now, more than ever, we must fight to restore a federal government that works for the people—not just the privileged few.