Shapiro administration taking ‘aggressive wait and see' approach to federal funding freeze

Yahoo

19-02-2025

State Rep. Abigail Salisbury (D-Allegheny) speaks during a House Appropriations Committee budget hearing with Community and Economic Development Secretary Rick Siger on Tuesday, Feb. 18, 2025. (House Democrats photo)
The Trump administration's planned spending cuts have Pennsylvania officials waiting for further guidance on frozen or cuts in funding for health, housing and energy programs, the state's top economic development official told state House lawmakers Tuesday.
Gov. Josh Shapiro's office has sued five federal agencies, alleging that Pennsylvania is unable to access $1.2 billion in federal grant funding appropriated by Congress and that another $900 million is being held up in an undefined review process.
Other federal agencies have announced plans to cut funding, including the National Institutes of Health (NIH) which said it will slash its allowance for administrative costs in research programs.
'There are many executive orders, public statements, that have lacked the clarity we need,' Rick Siger, the secretary of community and economic development, said during a wide-ranging three-hour hearing on the department's $2.3 billion request, an 11% increase over the current budget.
The White House published a memo Tuesday afternoon to the heads of federal executive departments and agencies instructing them to make public 'the complete details of every terminated program, cancelled contract, terminated grant, or any other discontinued obligation of federal funds.
'For too long, taxpayers have subsidized ideological projects overseas and domestic organizations engaged in actions that undermine the national interest,' the memo says. 'The American people have seen their tax dollars used to fund the passion projects of unelected bureaucrats rather than to advance the national interest.'
State Rep. Abigail Salisbury (D-Allegheny) asked in a House Appropriations Committee hearing how that could impact Pennsylvania's economy. The University of Pittsburgh and University of Pennsylvania are among the top recipients of NIH funding, Salisbury noted.
The innovation of Pennsylvania's life sciences research centers is critical to Pennsylvania's economic success, Siger told committee members, and that's where the commonwealth is most competitive.
'You could not, with all the funding in the world, start from scratch and create the research enterprise that we have here,' Siger said.
In a memo earlier this month, the NIH said it would cap facilities and administrative costs for research grants at 15% of a research grant, noting that the average reported by NIH was about 28%. The health research community urged the agency to reconsider the policy change.
'This abrupt decision jeopardizes lifesaving research and threatens to undermine the foundation of academic public health,' the Association of Schools and Programs of Public Health said in a statement.
Siger said the cuts could 'leave Pennsylvania at a really significant competitive disadvantage,' resulting in job losses as a result of funding cuts to ''the most powerful economic engines in our state.'
Asked whether DCED, which is charged with boosting innovation and business development, could step in to ease the impact of federal cuts, Siger said the administration is working on an 'aggressive wait and see' basis and is in contact with universities and others who might be affected by cuts.
'We've got to await certainty and guidance from federal agencies here, and once that occurs, we'll assess the impact on Pennsylvania specifically and on our universities as required by law,' Siger said.
DCED is a named plaintiff in the Shapiro administration's lawsuit in large part because of its home weatherization program, which relies on funding from the U.S. Department of Energy (DOE) to help low-income families make improvements to reduce their energy costs, Siger said.
According to the lawsuit, DOE has subjected a $186 million grant for the program to an 'unidentified agency review' before it will approve the state's claims for reimbursement. The suit says two energy efficiency grants for low-income households through the Pennsylvania Department of Environmental Protection are subject to similar review requirements.
'The inability to receive those federal funds will, I think, fundamentally invalidate our ability to take care of working class folks who spend a disproportionate share of their salary and their income on heating and cooling their home in the summer,' Rep. Joshua Siegel (D-Lehigh) said.