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How Are Federal Cuts Impacting Chicago?

Posted on February 24, 2025   |   Updated on September 30, 2025
Ava Wojnowski

Ava Wojnowski

President Donald Trump signing a document.

Donald Trump has already made numerous changes in his first month as president. (Andrew Caballero-Reynolds / Getty Images)

It’s been just over a month since President Donald Trump took office, and he’s already gotten to work slashing budgets, firing workers, and more.

A federal funding freeze in January threw Chicago nonprofits into a tailspin. But while that directive has been blocked and rescinded, here are other ways Chicago’s feeling the effects of Trump’s threatened and enacted funding cuts.

Health

These are just a few sectors of the healthcare industry already seeing impacts:

Transportation

Trump plans to award roadway grants based on marriage and birth rates. Illinois is on the lower end of fertility rates, ranking 42nd.

It’s expected that the federal funding for the Red Line Extension project should remain. It remains unclear how funding cuts could impact the O’Hare Airport expansion or other transportation projects.

Housing

The U.S. Department of Housing and Urban Development provides direct aid to Chicagoans and provides funding to the city through development grants, shelter support, and more.

Trump recently requested the review of 100 HUD programs in the U.S., including section 8, which could affect tens of thousands of low-income renters in Chicago. And the new leader of HUD, Scott Turner, is getting right to work.

Plus, Trump’s policies could affect the private sector. One Chicago housing development recently scaled back 80% due to concerns over potential tariffs. Mass deportations could shrink the homebuilding workforce.

Environment

Among those fired in a recent purge of federal employees were numerous Environmental Protection Agency workers in Chicago, some of whom were reinstated shortly after. Cuts to this EPA office could affect oversight of pollution not only in Chicago but also in surrounding states. Great Lakes restoration is another potential target for cuts. But some hope Vice President and former Ohio Sen. JD Vance will continue to advocate for protection.

Arts

New guidelines for arts grants prohibit federal money from going to programs that support “diversity, equity, and inclusion (DEI) that violate any applicable federal anti-discrimination laws.” The rules leave some Chicago artists worried they won’t get promised funds.

👀 On top of all that, we’re still watching to see if the Trump administration slashes funding to sanctuary cities. The feds are already suing Chicago after targeting the city for immigration enforcement.

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