NJ could lose $27.5B in federal funding freeze, Phil Murphy says
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Murphy talks about federal funds freeze
Gov. Phil Murphy reacts to Trump freeze on federal funds during editorial board meeting at The Record/NorthJersey.com Jan. 30, 2025 in Woodland Park.
Though the initial effort to freeze federal funding for grants, loans and other programs has been put on hold, the legal efforts to ensure that the halt in payments won’t be implemented continues.
A two-page letter from the White House budget office announced the freeze Monday night with a start time of 5 p.m. Tuesday.
Freezing the money in question as laid out in the letter from the Office of Management and Budget, which oversees the federal budget, would have a broad impact on all sorts of programs that receive federal funding in all parts of the nation.
Here in New Jersey, Gov. Phil Murphy exclusively told NorthJersey.com that the state would lose out on $27.5 billion and that 15% of the state’s workforce is funded through federal money.
It would have included about $1.5 billion needed for a Medicaid payment this week.
“These are blue and red states. He may be talking a lot about DEI and woke and all that< but this was across the country, and the way it was executed, the strategy, it made no sense at all,” Murphy said. “Just freezing stuff without any discrimination about what’s been frozen, any real deliberation or responsible approach, is just chaos, and that’s what we saw,” Murphy said.
The governor noted that if officials wanted to discuss more efficient government, he would be involved.
Murphy also said the state can “make up here and there for some of it” but ultimately can’t cover the entire $27.5 billion if the funding were to stop.
Circumstances like these are why a large surplus is needed, Murphy said, but “there’s no amount of money that any state has that can fully make up for all of this.”
What’s next with Platkin’s lawsuit?
In the hours before the freeze was set to take effect Tuesday, New Jersey Attorney General Matt Platkin and several other state attorneys general announced a lawsuit against the Trump administration to stop it.
U.S. District Judge Loren AliKhan did order a temporary halt until at least Feb. 3 for programs that already receive funding. It doesn’t stop the administration from freezing funds for new programs or require funding for programs that have already ended.
AliKhan scheduled another hearing for Monday at 11 a.m. to determine the next steps.
That ruling came in a suit filed by several advocacy groups, including the National Council of Nonprofits and the American Public Health Association, not the one from Platkin and the coalition of states.
The memo from Matthew J. Vaeth, acting director of the Office of Management and Budget and co-author of the Heritage Foundation’s Project 2025 playbook, said federal agencies must temporarily pause “all activities related to obligation or disbursement of all federal financial assistance” as well as other agency activities including, but not limited to, “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
Though it is called a “temporary pause,” there is no date specified for when funding would resume.
Katie Sobko covers the New Jersey Statehouse. Email: sobko@northjersey.com
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