Pritzker says federal funds still being withheld; warns of further
spending cuts
 [February 27, 2025]
By Peter Hancock
SPRINGFIELD – Gov. JB Pritzker accused the Trump administration this
week of continuing to withhold nearly $1.9 billion from Illinois state
agencies, nonprofits and small businesses, despite the fact that an
order to freeze those funds was rescinded after a federal judge issued a
ruling blocking the freeze.
Meanwhile, Pritzker also warned this week that as many as 770,000
Illinoisans stand to lose Medicaid health care coverage under a
Republican-backed budget resolution that cleared the U.S. House Tuesday
night. That resolution, which would amend the current federal fiscal
year’s budget, calls for deep cuts in federal funding for Medicaid, a
health insurance program for low-income and disabled individuals that is
jointly funded with state and federal money.
In a letter Tuesday to the White House Office of Management and Budget,
a letter cosigned by all 16 Democratic members of the state’s U.S. House
and Senate delegations, Pritzker demanded answers from the
administration about why the funds were being withheld and when the
state could expect to see the funds it is owed.
“These are federal funds that were passed by Congress, signed into law,
and promised to Illinois,” the letter stated. “State agencies, small
businesses, nonprofit organizations, and everyday citizens across
Illinois — including in rural communities — are still having trouble
accessing allocated federal funding.”
The letter marked the latest development in an intense legal and
political battle between the state and the Trump administration that
began Jan. 27, one week after Trump’s inauguration, when OMB issued a
memo directing federal agencies to temporarily pause distribution of
billions of dollars in grants, loans and other kinds of financial
assistance.
That memo prompted a flurry of lawsuits, including one that Illinois
Attorney General Kwame Raoul joined. The White House soon announced it
had rescinded the memo after a federal judge, in a separate suit filed
in Washington, D.C., granted a temporary stay blocking its
implementation pending further proceedings.
However, White House Press Secretary Karoline Leavitt added confusion to
the issue when she posted on social media that the White House had not
rescinded the funding freeze. It had only rescinded the OMB memo, “(t)o
end any confusion created by the court’s injunction.”
On Tuesday, U.S. District Judge Loren AliKhan, extended the temporary
stay by granting a preliminary injunction.
Despite the judicial orders, Pritzker’s letter indicated the
administration is still withholding $1.88 billion in federal funds owed
to 14 state agencies, boards and commissions, including funds that some
of those agencies distribute to outside parties in the form of grants.
[to top of second column]
|
Gov. JB Pritzker speaks with reporters during a news conference at
University of Chicago Medicine Wednesday, Feb. 26, 2025. (Capitol
News Illinois photo by Andrew Adams)
“These frozen funds impact programs that provide technical assistance
for small businesses, provide affordable solar energy for low-income
residents, improve roads and bridges, and more,” the letter stated. “On
behalf of our constituents, we are seeking full transparency and
accountability on any and all funding that has been paused or
interrupted.”
Medicaid funding
In a separate development Tuesday evening, the U.S. House narrowly
passed a budget resolution for the remainder of the current federal
fiscal year that calls for cutting an estimated $880 billion in federal
Medicaid and the Affordable Care Act funding.
The resolution passed, 217-215, on nearly a straight party-line vote,
with only one Republican voting no.
Under the Affordable Care Act, also known as “Obamacare,” states were
allowed to expand eligibility for their Medicaid programs to include all
adults with household incomes up to 138% of the federal poverty level –
or $36,777 a year for a family of three. The federal government pays 90%
of the cost of covering individuals in that expansion group,
substantially more than the 52% it pays for people enrolled in
traditional Medicaid.
According to the Illinois Department of Healthcare and Family Services,
as of June 30, 2024, roughly 770,000 people in Illinois were covered by
Medicaid under that expansion program. Under the 90-10 split between
federal and state funds, that translates to $7.5 billion a year in
federal funds and $750 million a year in state funds to cover the people
in that expansion group.
However, Illinois also has what’s known as a “trigger law” that says it
will stop offering Medicaid to individuals in that expansion category if
the federal government ever stops funding its 90% match rate. And
speaking at a news conference Wednesday morning in Chicago, Pritzker
warned that’s what is likely to happen if Congress passes the
Republican-backed budget plan.
“There’s no chance that the state of Illinois could pay the $7.5 billion
to keep everybody covered,” he said. “That’s just the reality, that if
Donald Trump and the Republican Congress eliminate the Medicaid
expansion, we will have people who get sick and die because they don’t
have coverage from that Medicaid expansion.”
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state government
coverage to hundreds of news outlets statewide. It is funded primarily
by the Illinois Press Foundation and the Robert R. McCormick Foundation.
 |
