Trump blocked from imposing sweeping federal funding freeze

A US judge on Tuesday extended an order blocking President Donald Trump’s administration from instituting a sweeping freeze on trillions of dollars in federal funding by pausing grants, loans and other financial support. US District Judge Loren AliKhan in Washington wrote that while some funds had become unfrozen since she first temporarily blocked the administration’s spending pause, there remained a risk the administration might again try to shut off funding.
The judge, an appointee of Democratic former President Joe Biden, said for those reasons she agreed with groups representing nonprofits and small business that a preliminary injunction was necessary to block a further funding freeze.
“The injunctive relief that defendants fought so hard to deny is the only thing in this case holding potentially catastrophic harm at bay,” the judge wrote.
Those groups sued after the White House’s Office of Management and Budget on January 27 issued a memo directing federal agencies to temporarily pause spending on federal financial assistance programs. Trump began his second term as president on January 20.
The memo said the freeze was necessary while the administration reviewed grants and loans to ensure they are aligned with Trump’s executive orders, including ones ending diversity, equity and inclusion programs and directing a pause on spending on projects seeking to combat climate change.
The OMB later withdrew that memo after it became the subject of two lawsuits, one before AliKhan by groups including the National Council of Nonprofits and another before a judge in Rhode Island by Democratic state attorneys general.
But the plaintiffs argued that the memo’s withdrawal did not mean the end of the policy itself.
They pointed to a post on social media platform X by White House Press Secretary Karoline Leavitt shortly after the memo was withdrawn saying: “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo.”
AliKhan on Tuesday cited that social media post as a reason for why the case was not moot, as the judge barred the administration from implementing or reinstating under a different name the funding pause announced in the OMB memo.
The judge said the freeze was “ill-conceived from the beginning,” saying the administration either wanted to abruptly pause up to $3 trillion in federal spending overnight or have each federal agency review every single grant and loan for compliance in less than 24 hours.
AliKhan said the administration lacked any “clear statutory hook for this broad assertion of power,” and that its actions were “irrational, imprudent, and precipitated a nationwide crisis.”
The White House did not respond to a request for comment.
Skye Perryman, whose liberal-leaning group Democracy Forward represented the plaintiffs, hailed the ruling halting “the Trump administration’s lawless attempt to harm everyday Americans in service of a political goal.”