A federal judge on Friday sided with a coalition of 22 states and temporarily blocked a federal aid funding freeze directed by the Trump administration — the second such order this week.
U.S. District Judge John J. McConnell, in Rhode Island, said in his ruling that the wide-ranging directive in the Office of Management and Budget memo that caused chaos and confusion this week in Washington and across the country appeared to violate the law.
"The Executive’s action unilaterally suspends the payment of federal funds to the States and others simply by choosing to do so," the judge wrote.
"The Executive cites no legal authority allowing it to do so; indeed, no federal law would authorize the Executive’s unilateral action here," McConnell added, granting the coalition's request for a temporary restraining order.
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The Justice Department argued the issue is moot because the White House memo was rescinded Wednesday, two days after it was sent to federal agencies outlining a widespread freeze on most federal grants and loans.
The judge noted that after the memo was rescinded, White House press secretary Karoline Leavitt tweeted: “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”
McConnell said "the evidence shows that the alleged rescission of the OMB Directive was in name-only."
“Based on the Press Secretary’s unequivocal statement and the continued actions of Executive agencies, the Court finds that the policies in the OMB Directive that the States challenge here are still in full force and effect and thus the issues presented in the States’ TRO motion are not moot,” he wrote.
The White House and Justice Department did not immediately respond to requests for comment.
The OMB memo issued Monday night directed federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
The memo said the pause would allow the administration to review which programs are “consistent” with President Donald Trump’s agenda. It said Social Security, Medicare and direct payments to individuals should not be impacted, but was vaguely worded, causing confusion about what aid would be halted. After it was issued, there were reports of people and organizations unable to access systems to receive their federal aid.
The memo also led to a pair of lawsuits before it was rescinded — one by a coalition of nonprofits in Washington, D.C., and another by the coalition of states and the District of Columbia.
On Tuesday, U.S. District Judge Loren AliKhan paused the administration's directive to allow for full arguments on it the following week.
McConnell's order goes a bit further, finding that the states are "are likely to succeed on the merits of some, if not all, their claims."
"Federal law specifies how the Executive should act if it believes that appropriations are inconsistent with the President’s priorities – it must ask Congress, not act unilaterally," he wrote.
“Are there some aspects of the pause that might be legal and appropriate constitutionally for the Executive to take? The Court imagines there are, but it is equally sure that there are many instances in the Executive Orders’ wide-ranging, all-encompassing, and ambiguous ‘pause’ of critical funding that are not,” his decision said. “The Court must act in these early stages of the litigation under the ‘worst case scenario’ because the breadth and ambiguity of the Executive’s action makes it impossible to do otherwise.”
The judge's temporary restraining order indefinitely blocks the administration from freezing existing federal financial assistance to states until he rules on a forthcoming motion for a preliminary injunction from the states.
Rhode Island Attorney General Peter Neronha thanked the judge "for seeing the irreparable harm that this directive would cause."
The "Executive Branch does not have the authority to intercept crucially important federal funding that the Congress has already allocated to the states, and on which Americans rely. This directive targets public safety, health care, veterans’ services, childcare, disaster relief, and countless other cornerstones of American life," and "was implemented to inspire fear and chaos," he said in a statement.
