Federal funding freeze prompts chaos, confusion, lawsuits

President Donald Trump has called for a temporary freeze on certain federal aid — sowing confusion and concern among California’s state officials and advocacy groups. 

As CalMatters’ reporters explain, a memo from the U.S. Office of Management and Budget directed federal agencies to pause financial grants and loans that could be “implicated” by any of the president’s prior executive orders. 

The directive does not include Social Security and Medicare, as well as “assistance provided directly to individuals,” such as food stamps, Pell grants and rental assistance. It does, however, target “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” 

Despite the two-page memo’s sweeping breadth, its few details made it unclear which key programs will be affected and for how long. The administration later requested federal agencies to send budget details for 3,200 federal spending programs, and information about whether the programs support undocumented immigrants or promote abortion, “gender ideology,” or “diversity, equity and inclusion” efforts.

The administration intended the directive to go into effect Tuesday, but a federal judge temporarily blocked the order.

Reactions by California’s elected Democratic officials ranged from cautious to dire. Gov. Gavin Newsom said, “We could react to all this or we could have a more constructive wait-and-see.” While California U.S. Rep. Jared Huffman said to CalMatters, “This kind of destabilization is the way authoritarians seize power. … I think it’s dictatorial.”

California is expected to distribute $168 billion of federal grants and other funding in 2024-25, according to Assembly budget advisor Jason Sisney.

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When you pay your utility bill, there’s a baked-in cost that you won’t see in any line item. Known as a “return on equity,” this amount goes toward shareholders for the risk of investing in utility companies, writes CalMatters’ Malena Carollo.

The California Public Utilities Commission is responsible for determining the state’s rates of return, which play a big role in companies’ profits. In 2024 the approved shareholder return rate for Southern California Edison, PG&E and San Diego Gas & Electric were around 10% — more than double the rate of 10-year U.S. treasury bonds, which is used as a benchmark.

A CalMatters analysis of return rates dating back to 2020 found that the rates cost California customers hundreds of millions of dollars annually. This comes during a time when Californians pay more than twice the national average in utility bills, with costs nearly doubling within the last decade. 

Some of the price hikes are due to wildfire prevention efforts. Edison equipment is currently under scrutiny by investigators who are looking into the cause of the Eaton Fire that killed at least 17 people.

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Among California undergraduates, about 160,000 pursue degrees at private, nonprofit universities. Private institutions have many benefits, such as smaller class sizes and specific academic programs. But for low-income students, the costs to attend these schools can be exceptionally high, explain CalMatters’ Mikhail Zinshteyn and College Journalism Network reporters. 

A CalMatters analysis found that on average, a low-income freshman — defined as a household income below $48,000 — paid around $21,000 to attend private campuses for one year in 2021-22, the latest year information was available. In comparison, the net price to attend California State University is around $6,000 a year on average, and under $10,000 at the University of California.

There are some exceptions: Stanford, for example, ends up being nearly free for freshmen whose family have incomes below $100,000. But part of the reason why private colleges are expensive is because other than state financial aid for their students, they don’t get the state subsidies public universities receive, which is about $10 billion annually.

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After nearly a decade, a criminal case involving anti-abortion activists and a controversial video of Planned Parenthood executives in California has concluded. Find out what happened from CalMatters health reporter Kristen Hwang.