Judge blocks Trump administration memo that froze grants

WASHINGTON — A federal judge on Monday ordered the Trump administration to cease any use of an Office of Management and Budget memorandum issued last week that froze federal grants, criticizing the administration for actions that potentially “run roughshod” over Congress’ power over federal spending.

Judge Loren L. AliKhan of the U.S. District Court for the District of Columbia in a temporary restraining order instructed OMB to order departments to release any funds they froze using the memo.

The order also restricts OMB from “implementing, giving effect to, or reinstating under a different name” the memo. But it does not rule out the possibility that the Trump administration could require fund pauses under some executive orders, as the Justice Department has argued.

AliKhan addressed that somewhat in the order, writing that there is evidence “the scope of frozen funds appears to extend far beyond the reach of the executive orders.”

She ruled in favor of national nonprofit groups and individual nonprofits that had challenged last week’s government-wide freeze of funding disbursements, the latest in several developments in government memos and court filings have caused confusion over the Trump administration’s effort to freeze most federal grants.

AliKhan last week temporarily blocked the Trump administration from implementing the memo until she could have the hearing Monday on whether to issue a temporary restraining order.

The Trump administration rescinded the OMB memo on the funding freeze the next day, and then the White House press secretary posted on social media that move did not mean an end to the funding freeze.

AliKhan wrote in the order that there was evidence that the government’s rescission of that memorandum after her initial block of the memo last week “strains credulity,” and she said it “appears that OMB sought to overcome a judicially imposed obstacle without actually ceasing the challenged conduct.”

“The rescission, if it can be called that, appears to be nothing more than a thinly veiled attempt to prevent this court from granting relief,” AliKhan wrote.

And she wrote the Trump administration’s actions potentially interfere with Congress’ power over federal appropriations.

“OMB ordered a nationwide freeze on pre-existing financial commitments without considering any of the specifics of the individual loans, grants, or funds. It did not indicate when that freeze would end (if it was to end at all),” AkiKhan wrote. “And it attempted to wrest the power of the purse away from the only branch of government entitled to wield it.”

A federal judge in a different case in Rhode Island issued a temporary restraining order Friday, which the Justice Department argued in a filing Monday only covers the OMB guidance itself, not individual federal agencies’ decisions to freeze funding on their own.

The DOJ filing also says the government interpreted the order, in a case brought by a group of states, to be limited only to the OMB and did not require other federal agencies to comply.

Hearing held

AliKhan touched on the confusion in her hearing when the Justice Department argued that federal agencies still have the discretion to pause funding because of President Donald Trump’s executive orders, separate from the OMB memo.

“There are agencies exercising their own discretion, there are agencies pausing funding as a result of the executive orders; those actions are outside of this suit,” Justice Department attorney Daniel Schwei said.

AliKhan said that court filings and arguments “suggests to me that the OMB directive is doing some independent work” on the memo, even though it had been administratively stayed by her.

The nonprofits, in court filings over the weekend, called the recission of the OMB memo “little more than a bait and switch,” saying the federal government has restored some programs but not others. The federal government was continuing to freeze funds at the EPA, for instance, the nonprofits said.

In court filings, the nonprofits characterized the administration’s purported rescission as a deliberate attempt to circumvent AliKhan’s order and cited a social media post from White House press secretary Karoline Leavitt that said it was “NOT a rescission of the federal funding freeze.”

AliKhan, during Monday’s hearing, pointed to Leavitt’s social media post as possible evidence that “the stayed and rescinded order is still in effect.”

AliKhan said that numerous groups had filed declarations from organizations that have “nothing to do” with Trump’s executive orders, including a nonprofit in West Virginia that provides services for disabled people. It said it faced consequences like “laying people off and potentially completely collapsing” because of the funding freeze.

AliKhan said she intended to issue a ruling before the end of the day, when her previous administrative stay would lapse.

Kevin Friedl, representing the nonprofits, argued that numerous agency payment portals are inoperative or are not providing funding if they’re up. He pointed to statements from the EPA and National Science Foundation about freezing funds based on the OMB memo that were issued after the purported rescission as evidence the freeze was still happening.

“That’s totally inconsistent with the idea that there is some sort of selective decisionmaking going on here” to comply with the executive orders, Friedl said. “It’s clearly a mechanism for instituting blanket freezes of the kind OMB ordered.”

Friedl called the administration’s actions “about as clear of a statement” that the court would ever see that was intended to skirt the judge’s order.

Schwei argued that the case is moot because the OMB has rescinded the guidance. He also argued that the nonprofits were trying to have the court oversee federal funding decisions by individual agencies they couldn’t attribute back to the OMB decision.

“They are requesting this court superintend all federal financial assistance for the entire federal government,” Schwei said.

And Schwei argued in the Washington court hearing that the order from the Rhode Island judge was broad enough to preclude the need for any further protections.

AliKhan told Schwei that the issuance of a sweeping policy in a two-page OMB memo undercuts the argument that the nonprofits should have to connect the broad OMB memorandum to specific agency decisions.

“That seems to be a problem of your own making,” AliKhan said.

The Trump administration issued the Jan. 27 memo seeking to pause all federal grant and loan disbursements pending a review for their compliance with Trump’s executive orders on immigration, rolling back diversity protections and targeting transgender Americans.

The decision set off confusion across the federal government and sparked court challenges from nonprofits National Council of Nonprofits, American Public Health Association, Main Street Alliance and SAGE in the D.C. case, and a coalition of states in Rhode Island.

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