Steel venture in JD Vance's hometown under scrutiny as Trump targets manufacturing sector for budget reductions
Rewritten Article:
Title: The Trump Administration's Plans to Ax Key Manufacturing Programs Stirs Controversy
Jumpstarting the manufacturing sector is a cornerstone of President Donald Trump's America-first economic plan. Yet, his administration is reportedly pondering a move that could undermine this objective – slashing a critical program providing financial support to key U.S. manufacturing industries. In the hometown of Vice President JD Vance, nestled in the heart of the Rust Belt, this move could mean the demise of a steel giant's revitalization project.
A $500 million grant from the Biden administration was earmarked for Cleveland-Cliffs in Middletown, Ohio, to modernize its ailing blast furnaces. In Pennsylvania, another $75 million was allocated for a similar renovation project. By replacing coal with hydrogen, natural gas, and electricity, the new furnaces would have prolonged the plant's lifespan and positioned the steel company for a greener, more sustainable future.
However, according to internal administration documents obtained by CNN, these grants – which would have created over 100 permanent jobs and 1,200 construction jobs in Middletown alone – are on the chopping block under the Trump administration's cost-cutting measures.
Sources close to the Department of Government Efficiency reveal that officials have been instrumental in deciding which programs to axe and which to preserve.
Critics, including Democratic Rep. Marcy Kaptur of Ohio, have lambasted the Trump administration's alleged efforts to chop funding, referring to Elon Musk who, as the head of the efficiency department, is alleged to have spearheaded budget cuts across various federal agencies.
Energy Department spokesperson Ben Dietderich asserts that "no final decisions have been made" regarding the funding's fate and that alternative plans are still under consideration.
The Energy Department, which has been sitting on billions of dollars' worth of grant programs meant for modernization projects, has kept these funds frozen for months while it mulls over potential cuts. The $6.3 billion program responsible for awards to Cleveland-Cliffs and other major industrial companies could be slashed by two-thirds, according to internal documents obtained by CNN.
Economists fear that these drastic moves could send shockwaves through America's manufacturing sector, particularly as the global economy grapples with the uncertainties brought about by Trump's tariff stand-off. While Trump's tariffs were intended to catalyze growth in manufacturing, they could lead to short-term pain as markets fluctuate, concerns about a recession mount, and supply chains seize up.
Certain projects, such as the $500 million grant awarded to aluminum company Century Aluminum to establish a cutting-edge smelter – the first of its kind in decades – have been spared.
However, the mercurial nature of the funding cuts in key states like Ohio has left stakeholders scratching their heads.
One source told CNN that cutting a vital federal grant to one of the largest employers in the vice president's hometown was utterly incomprehensible and lacked any discernible political logic. "Cutting grants to a company like Cliffs, which has been vocally supportive of Trump's tariffs, appears to be a mysterious and ill-conceived step taken by inexperienced staffers at DOGE," the source said.
Shawn Coffey, president of the union representing over 2,000 Cleveland-Cliffs Middletown workers, called the funding "consequential."
"Modernizing a facility and prioritizing environmental protection is vital for the future of my children and grandchildren," Coffey explained, who leads the International Association of Machinists Local 1943. "If the funding is withdrawn, it would be up to the company to cover the project costs on its own. That means fewer jobs for us in the Middletown works."
Cleveland-Cliffs has yet to respond to CNN's request for comment on the funding.
A former employee at the Department of Energy's Office of Clean Energy Demonstrations, which oversees the $6.3 billion grant program and others, told CNN that the Trump administration's grant freeze had disrupted early planning work on many projects slated under the Biden administration. Projects that initially secured small amounts of funding to jumpstart construction planning suddenly found themselves without financial support.
"It seemed like an on/off switch," the former employee said, commenting on the chaotic management of the situation. Additionally, energy department staff members were reportedly instructed to remain tight-lipped about the future of federal grants for companies, complicating matters even further.
The climate-conscious Biden administration viewed these grants as a means to compel major industries to pollute less, modernize and become leaders of their sectors for generations to come. The Trump administration's hasty cutbacks, Fazili argued, ran counter to these objectives.
"Supporting the manufacturing sector and then inhibiting its growth through funding freezes is like advocating for economic progress and killing it with the same stroke," Fazili stated. Rather, she posited, bolstering the manufacturing sector relies on strategic investments enabled by programs like the one Cleveland-Cliffs sought funding for.
The Trump administration's backtrack on these grants, Fazili warned, could have devastating implications, particularly as uncertainties persist due to Trump's trade policies. "Bedrock industries like steel, aluminum, and cement could face severe consequences as a result," Fazili concluded.
Enrichment Data:The Trump administration's plan to slash funding for crucial programs aimed at supporting small and medium-sized manufacturers could result in reduced competitiveness, slower job growth, and decreased innovation in manufacturing technologies. In FY 2024, the Manufacturing Extension Partnership (MEP) generated $15 billion in new or retained sales and $2.6 billion in cost savings for manufacturers across the United States. The MEP program's cuts directly impact several states, potentially leading to job losses and economic instability. The abrupt funding cuts for the MEP and other grant programs could hinder the nation's manufacturing sector's ability to adapt to evolving market conditions and modernize For additional information on the impact of the MEP cuts and specific companies like Cleveland-Cliffs, refer to the enrichment data section provided.
- The Trump Administration's decision to potentially cut funding for key manufacturing programs could lead to a climate of rust in the Rust Belt, particularly if a steel giant's revitalization project in the Vice President's hometown is affected.
- The benefits of the proposed funding cuts are questionable, as the slashed programs could have created over 1,300 jobs (100 permanent and 1,200 construction) and positioned steel companies for a greener, more sustainable future.
- The Trump Administration's apparent attempt to ax crucial programs, such as the one earmarked for a $500 million grant to Cleveland-Cliffs, could have devastating implications for the manufacturing sector and American economy, amounting to billions in potential losses for a sector that is crucial to the national climate and its future.
