A federal appeals court on Wednesday left in place a lower court’s ruling that blocked the Office of Management and Budget from enacting a sweeping freeze on federal funding to states, writing that it posed an obvious risk to states that depend on the money.
The decision denied a request from the Trump administration to stay a ruling by Judge John J. McConnell Jr. of the Federal District Court for the District of Rhode Island this month. Judge McConnell found that the administration had effectively subverted Congress in choking off funds in ways that jeopardized state governments and the services they provide their residents.
A coalition of nearly two dozen attorneys general from Democratic-led states had sued in January to halt the freeze. They argued that the funding, including critical disaster relief disbursed by the Federal Emergency Management Agency and early childhood education support provided through Head Start, had all been thrown into doubt.
In their opinion, a three-judge panel of the U.S. Court of Appeals for the First Circuit wrote that the freeze would cause the states an array of irreparable harms, including forced taking on of debt, “impediments to planning, hiring and operations,” and disruptions to research projects underway at state universities.
In its original guidance at issue in the lawsuit, the Office of Management and Budget had advised agencies that the pause pertained only to funding streams that were affected by some of President Trump’s early executive orders, such as those aimed at ending diversity, equity and inclusion programs and climate change funds.
The states behind the lawsuit, however, argued that the pause had been conducted chaotically and had caused significant upheaval, preventing them from gaining access to federal grants that seemed to fall outside those orders.
As an example, in a filing on Wednesday night, an assistant attorney general from Illinois said that the state was still unable to attain money through the Earthquake State Assistance grant program.
In their opinion declining to stay Judge McConnell’s preliminary injunction, the judges wrote that the states had documented numerous cases of “pauses, freezes, and sudden terminations of obligated funds” suggesting that the freeze on federal funds was often indiscriminate. The arbitrary nature of the freeze, they wrote, further suggested that the coalition of states was likely to prevail in the lawsuit.
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