Washington — A federal judge on Tuesday continued to block the Office of Management and Budget from freezing federal assistance, delivering another blow to the Trump administration’s ongoing efforts to shrink federal spending.
Judge Loren AliKhan from the U.S. District Court for the District of Columbia ruled in favor of a group of nonprofit organizations in finding that they are likely to succeed in their challenge to the pause on all federal grants, loans and other federal assistance programs. The judge found that the nonprofits proved that the “funding freeze would be economically catastrophic — and in some circumstances, fatal — to their members” and agreed to grant their request for a preliminary injunction while the case plays out.
AliKhan had previously issued a temporary restraining order that prevented the Trump administration from freezing federal assistance while she considered the nonprofits’ request for injunctive relief. The judge held a hearing on their motion last week.
The nonprofit groups had argued that the Trump administration exceeded its authority by ordering the nationwide funding freeze and said it was threatening the federal aid based on their exercise of their First Amendment rights of speech and association. AliKhan agreed in her decision that the government “may be crossing a constitutional line.”
“The scope of power OMB seeks to claim is ‘breathtaking,’ and its ramifications are massive,” wrote the judge, who was appointed by former President Joe Biden. “Because there is no clear statutory hook for this broad assertion of power, plaintiffs are likely to succeed on the merits of this claim.”
AliKhan said that the nonprofits showed a “mountain of evidence” that “even the threat of a funding freeze was enough to send countless organizations into complete disarray.”
“While turning off funding streams appears to have been alarmingly easy, turning them back on has proven much more difficult,” she wrote.
OMB issued its memo directing federal agencies to temporarily pause all activities related to federal financial assistance on Jan. 27. The directive swiftly prompted two lawsuits — one by the group of nonprofits, filed in federal district court in Washington, D.C.; and the second from a group of Democratic-led states, brought in Rhode Island.
But two days after the OMB issued its memo, it was rescinded. Shortly after the memo was walked back, White House press secretary Karoline Leavitt announced on social media that the new directive was not a rescission of the federal funding freeze, but solely an unwinding of OMB’s Jan. 27 memo.
While the government argued that the White House memo to pause grants and other assistance was rescinded and should not be considered broadly, “agencies still implemented the original memorandum as written,” AliKhan wrote in her decision, which resulted in funds for programs like the “Head Start” program and funds for small businesses being frozen.
“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,’” AliKhan added.
The White House budget office’s pause on federal assistance is part of President Trump’s efforts to overhaul the federal government. The president also took executive action to order a 90-pause on foreign assistance funding, also the subject of legal challenges, and has fired thousands of federal workers who were considered probationary. Another 75,000 government employees accepted an offer from the new administration to resign their positions but continue receiving full pay and benefits until Sept. 30.
The Trump administration has hit roadblocks in the courts, as dozens of lawsuits have been filed that challenge Mr. Trump’s policies and initiatives aimed at shrinking the size of the federal government.
In the Rhode Island case involving the funding freeze, brought by a group of 22 states and the District of Columbia, a federal judge found that the Trump administration had not complied with an earlier order requiring agencies to restore any paused or withheld federal funds. The states had argued that they continued to be denied access to assistance.
The judge in that case, U.S. District Judge John McConnell, demanded the Trump administration reinstate any frozen funds and said the pause on federal assistance is likely unconstitutional.
Jake Rosen is a reporter covering the Department of Justice. He was previously a campaign digital reporter covering President Trump’s 2024 campaign and also served as an associate producer for “Face the Nation with Margaret Brennan,” where he worked with Brennan for two years on the broadcast. Rosen has been a producer for several CBS News podcasts, including “The Takeout,” “The Debrief” and “Agent of Betrayal: The Double Life of Robert Hanssen.”
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