On Tuesday, January 28, 2025, U.S. District Judge Loren AliKhan temporarily blocked the Trump administration’s attempt to freeze federal grants, loans, and other financial assistance.
A memo from the Office of Management and Budget, dated January 27, 2025, ordered a temporary pause in federal funding for “all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency actions that may be implicated by [President Trump’]s executive orders.” The temporary pause was set to take effect on January 28, 2025, at 5:00 p.m. A senior administration official said that the order should not be understood to mean a full funding freeze. Rather, the official stated that agencies were to review grants, loans, and other programs to ensure compliance with the administration’s priorities. The Office of Management and Budget issued a fact sheet that states the pause in funding is “expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.” President Trump has signed 38 executive orders thus far into his second term.
A lawsuit was filed in the U.S. District Court, District of Columbia, on January 28th by the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and Sage against the Office of Management and Budget. The nonprofit organizations requested a temporary stay, arguing that the memo “fails to explain the source of OMB’s purported legal authority to gut every grant program in the federal government.” The complaint also argues that the memo “fails to consider the reliance interest of the many grant recipients. . . and announces a policy of targeting grant recipients based in part on those recipients’ First Amendment rights and with no bearing on the recipients’ eligibility to receive federal funds.” Judge AliKhan granted the request for temporary stay. The stay is in effect until Monday, February 3rd, at which point another hearing is scheduled.
Shortly after Judge AliKhan’s order granting the temporary stay in the nonprofit organizations’ lawsuit, attorneys general from 22 states and the District of Columbia filed a separate lawsuit in the U.S. District Court for the District of Rhode Island challenging the funding freeze. The request for an emergency temporary restraining order argues that the memo violates the Administrative Procedure Act and is unconstitutional. The request alleges that “[t]he substantial confusion created by the [memo]. . . will result in immediate and devastating harm to Plaintiff States.” The attorneys general claim that the memo will prevent states from providing “certain essential benefits for residents, pay public employees, satisfy obligations, and carry on the the important business of government.” Chief U.S. District Judge John McConnell will hear the request for an emergency temporary restraining order later today.
Additional Reading
Trump administration to defend funding freeze against another legal challenge, Reuters (January 29, 2025)
Judge pauses Trump’s federal funding freeze as confusion and frustration spread, NPR (January 28, 2025)
Federal Judge Temporarily Halts Trump’s Federal Grants Freeze, Democracy Docket (January 28, 2025)
National Council of Nonprofits et al v. Office of Management and Budget et al (Case No. 1:2025cv00239)
Complaint in National Council of Nonprofits et al v. Office of Management and Budget et al
State of New York et al v. Trump et al (Case No. 1:2025cv00039)
Request for Emergency Temporary Restraining Order in State of New York et al v. Trump et al
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