Judge blocks Trump team from freezing federal aid money

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A federal judge dealt another setback to the Trump administration’s efforts to curtail federal spending by maintaining a block on the Office of Management and Budget’s attempted freeze of federal assistance programs.

Judge Loren AliKhan of the U.S. District Court for the District of Columbia upheld the challenge brought by nonprofit organizations against the pause on federal grants, loans, and other assistance programs. In her ruling, she determined that the nonprofits successfully demonstrated how the funding freeze would devastate their operations, potentially leading to their closure in some cases.

The decision follows AliKhan’s earlier temporary restraining order that prevented the Trump administration from implementing the freeze while she evaluated the nonprofits’ request for an injunction. After conducting a hearing last week, she has now extended this protection.

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Last month, Trump’s OMB announced a temporary suspension of agency grants, loans, and financial assistance programs. The office explained their action, stating, “The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar. In Fiscal Year 2024, of the nearly $10 trillion that the Federal Government spent, more than $3 trillion was Federal financial assistance, such as grants and loans.”

The OMB memo further detailed that “This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.”

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The office elaborated on the implementation timeline: “This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities. The temporary pause will become effective on January 28, 2025, at 5:00 PM. Even before completing their comprehensive analysis, Federal agencies must immediately identify any legally mandated actions or deadlines for assistance programs arising while the pause remains in effect. Federal agencies must report this information to OMB along with an analysis of the requirement. OMB also directs Federal agencies to pause all activities associated with open NOFOs, such as conducting merit review panels.”

In her ruling, Judge AliKhan criticized the administration’s approach, noting that “The scope of power OMB seeks to claim is ‘breathtaking,’ and its ramifications are massive. Because there is no clear statutory hook for this broad assertion of power, plaintiffs are likely to succeed on the merits of this claim.”

She further admonished the administration, stating, “Defendants still cannot provide a reasonable explanation for why they needed to freeze all federal financial assistance in less than a day to ‘safeguard valuable taxpayer resources.'”