Economic Inclusion department draws federal funding threat from Ohio senator

Cincinnati officials are facing pressure from Washington after U.S. Sen. Bernie Moreno threatened to seek a suspension of federal funding unless the city reverses its newly established Department of Economic Inclusion and Procurement. 

Moreno’s warning followed the Cincinnati City Council’s approval of an ordinance reorganizing procurement and supplier diversity functions into a standalone department. 

He argues the department expands diversity, equity, and inclusion, or DEI, policies that conflict with federal priorities under the Trump administration.  The discussion also raises the topic of Economic Inclusion as it relates to these policies.

Moreno delivered the warning in a letter addressed to Mayor Aftab Pureval. In the letter, he called the ordinance unlawful and said he intends to ask federal agencies to review or suspend grants to Cincinnati if city leaders fail to halt implementation of the department. According to Moreno, federal taxpayer dollars should not support policies that prioritize race or ethnicity in contracting decisions.  

“Taxpayers should never foot the bill for woke DEI policies or initiatives. Unfortunately, however, the DEI Procurement Ordinance expands an already bloated DEI bureaucracy at City Hall and creates a new office that will likely subject all the City of Cincinnati’s contracts to a DEI analysis. Cincinnati’s taxpayers deserve a government that rewards competence and merit, not politically driven quotas or preferences based on race or ethnicity.”

Read the full letter here.

The dispute has quickly become one of the highest-profile political conflicts involving Cincinnati this year. While Moreno cannot independently terminate federal funding, his request could prompt federal agencies to review whether city policies comply with current federal directives governing grant recipients. Any funding action would ultimately depend on federal agencies and applicable law.  

Why the Economic Inclusion department was created

The Cincinnati City Council approved the ordinance in June as part of a broader government reorganization. The measure created the Department of Economic Inclusion and Procurement by combining procurement operations with programs intended to expand participation among small, disadvantaged, and historically underrepresented businesses in city contracting.

City officials have said the restructuring is designed to modernize purchasing, improve oversight, and streamline contracting. Supporters argue the department helps ensure qualified small businesses receive opportunities to compete for city work while strengthening procurement efficiency.

According to reports from WLWT and Fox News Digital, Moreno believes the ordinance instead expands the city’s DEI bureaucracy and could inject race-based considerations into procurement decisions. He argues the ordinance places Cincinnati at odds with recent federal efforts to eliminate DEI programs from government operations.  

Economic Inclusion dispute centers on federal funding

Moreno’s letter requests that Cincinnati either repeal or significantly modify the ordinance and provide an action plan demonstrating compliance with federal policy. If city leaders decline, he said he will ask federal agencies to suspend or review funding provided to the city.  

Federal dollars support numerous Cincinnati projects, including:

• Transportation and roadway improvements
• Public transit programs
• Affordable housing initiatives
• Public safety grants
• Community development projects
• Infrastructure improvements

Although Moreno serves in the U.S. Senate, he does not possess unilateral authority to stop those funds. Federal agencies typically administer grants under statutes, regulations, and grant agreements that establish when funding may be suspended or terminated.  

Legal experts generally note that federal funding disputes often involve administrative reviews, agency determinations, and, in some cases, litigation before any grants are withheld.

Other news organizations report similar concerns

WLWT first reported details of Moreno’s letter after obtaining information about the senator’s challenge to Cincinnati’s ordinance. Fox News Digital also reported on the letter, highlighting Moreno’s argument that taxpayers should not finance what he described as an expanding DEI bureaucracy. Both outlets reported that the senator believes the ordinance could violate current federal policy regarding diversity initiatives.  

Moreno’s latest warning also follows previous occasions when he publicly threatened to seek reviews of federal funding tied to Cincinnati. Last year, after a highly publicized downtown assault, Moreno warned he would ask federal agencies to suspend funding if city officials failed to improve public safety. He later met with Mayor Pureval and local officials, and those discussions continued without any announced federal funding suspension.  

That earlier episode illustrates the distinction between a senator requesting federal action and agencies actually withholding grant money.

What happens next in the Economic Inclusion debate

As of publication, no federal agency has announced plans to suspend Cincinnati’s grants because of the ordinance. The city also continues to receive federal funding through existing transportation, housing, infrastructure, and public safety programs.

Mayor Pureval’s administration has not announced plans to repeal the ordinance. City officials have consistently described the department as an administrative restructuring intended to improve procurement and expand economic opportunity rather than establish unlawful contracting preferences.

The issue could continue to develop if federal agencies respond to Moreno’s request or if Cincinnati formally defends the ordinance before federal officials.

For Cincinnati residents, the dispute carries broader implications beyond politics. Many city projects rely on federal partnerships, and any prolonged review of grant eligibility could affect planning timelines, even if funding ultimately remains intact.

Businesses that compete for city contracts also will closely monitor how the department implements its policies. Procurement rules influence opportunities for contractors, minority-owned businesses, small companies, and suppliers across the region.

Whether the dispute evolves into a legal challenge or remains a political disagreement will likely depend on future actions by both the federal government and Cincinnati officials.