Protestors against Medicaid cuts outside the office of the eternally clueless Republican Sen. Ron Johnson in Milwaukee. Courtesy Civic Media.

Wisconsin Senator Chris Larson is concerned about the impact on Wisconsin’s state budget from Trump’s cuts to federal funding. The cuts being implemented at the federal level will create havoc with the Wisconsin state budget. Senator Larson has introduced emergency legislation – the Frozen Federal Funds Emergency Act – to help deal with this problem.

The proposed bill requires the legislature to convene an extraordinary session if the Trump funding cuts are implemented. The extraordinary session would “consider” providing money from the “budget stabilization fund to state agencies, eligible local governmental units and eligible nonprofit organizations to offset estimated deprivation amounts.” It prioritizes funding for “essential services” and provides for the reimbursement of the fund if and when the federal funding is restored.

Senator Larson explains “...the Frozen Federal Funds Emergency Act ...authorizes temporary use of the state’s rainy day fund to fill funding gaps for impacted state agencies, local governments, school districts and nonprofit organizations that depend on federal resources. This ensures that some critical services can remain uninterrupted while awaiting the restoration of federal aid.”

The Wisconsin biennial budget is about $100 billion. In 2023-25 budget Wisconsin received $28 billion in federal funding for various Wisconsin activities. The budget stabilization fund (rainy day fund) currently has only $1.9 billion in it (a record high). Wisconsin has a $4.6 billion surplus from the 2023-24 budget. So clearly the state will have severe difficulty replacing federal funding for the next budget. 

Senator Larson puts the situation into perspective, “...if we took every dollar that state residents pay for their state income taxes, it wouldn’t be enough to cover all that the federal government funds.”

Given the budget-cutting history of the Republican-controlled Wisconsin legislature, it is unlikely they will act to fill the gap in federal funding. Even it they wanted to, no legislature is can replace the loss of more than 25% of the budget. 

The chaotic, uncertainty in federal funding is making budgeting in Wisconsin virtually impossible without severe damage to the state and great harm to many people.

Senator Larson says, “...when federal funding is frozen, the people of Wisconsin suffer – especially those in our rural communities, low-income households, working-class Wisconsinites, and children who depend on federally backed programs for health care, transportation, education and economic stability. Our public schools, local governments and nonprofits cannot afford uncertainty when their budgets are built around federal funding streams.”

Trump’s freeze on federal funding is illegal and unconstitutional. He does not have the authority to change funding that Congress has authorized. He can not legally do this with executive orders (in essence dictatorial fiat). He claims to be rooting out waste and fraud. But the massive cuts, across multiple federal agencies, state and local government activities, nonprofit organizations and state and private universities show this is a lie. 

Clearly significant fraud or waste is not happening across all these activities. This is simply an excuse to end any and all government-funded activities that do not meet “the President’s priorities.” But the president does not set national spending priorities. He can participate in the process, but Congress sets the spending priorities through the federal budget and the president’s job is to “faithfully execute the law.”

Medicaid in Wisconsin has no significant problems with fraud. Most of the federal funding in the 2023-24 Wisconsin budget (61% or $17 billion) went to the Wisconsin Department of Health Services primarily to support Medicaid. Medicaid pays for health care for 25% of Wisconsin low-income, elderly or disabled residents. If federal funding is frozen, people in Wisconsin will suffer and many medical facilities will close.

Maureen Conrad serves on the Milwaukee County Commission on Aging’s Advocacy Committee. Speaking at a town hall meeting with Senator Larson, she countered Trump’s unsubstantiated claims of Medicaid fraud with facts. She said, “Wisconsin has a rigorous process to ensure all people who apply or renew their Medicaid coverage are checked. Wisconsin has a near 0% eligibility error rate...Wisconsin has 1,400 employees to check and verify every application or renewal before a person can get or keep Medicaid. Every year, they must prove they still meet the criteria to be on Medicaid by proving identity, income, assets and disability status.”

Jill Underly, Wisconsin Superintendent of Public Instruction, has rejected the Trump administration’s threats to K-12 funding for Wisconsin. Trump has connected to federal school funding  to DEI and the other irrelevant culture war issues.  Underly says, “WDPI and Wisconsin’s 460 local educational agencies are all in compliance with current federal law, and any attempt by Trump’s Department of Education to punish Wisconsin schools for failing to sign their phony pledge [on diversity] would be illegal.”

The Trump funding freeze was challenged in court and several federal judges have issued temporary restraining orders to maintain the funding. The Trump administration claims to have rescinded the freeze, but news reports say funding for many grants, loans and programs is not being released. The Trump administration is illegally ignoring these court rulings.

The federal funding cuts are being done for political and ideological reasons – not fiscal necessity in the federal budget. It is clear that Trump’s “priorities” involve crazy, unsubstantiated, political motivated accusations about DEI, transgender kids, immigrants, sanctuary cities and political opponents. It is about implementing the extreme anti-government ideology of Project 2025. 

Trump is even attacking private universities, law firms and other organizations. A president has no authority over the internal management decisions of private organizations. He is using threats to withhold grants, contracts, research funding and other government support if these private organizations don’t suspend DEI programs, stop providing pro-bono services to liberal causes or discipline student protesters he doesn’t like. 

Some of these businesses and institutions have capitulated to Trump’s demands. Thankfully other law firms and universities are standing up for what is right and are suing to stop his illegal actions. 

Senator Larson calls the Trump actions “extortion.” It is using federal funding to blackmail people. He says, “The Trump administration’s attempt to bully and intimidate leaders from carrying out their mission is an un-American attack on local control and must be rejected.”

But being a bully is Trump’s “style.” Trump told voters he would be a “dictator on day one. ” Now he is breaking all the rules and norms of our democracy to rule by dictatorial executive order. The results are economic and budgetary chaos.