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By Jesus Mesa and Gabe Whisnant
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U.S. District Judge Loren AliKhan of Washington, D.C., extended a pause on the Trump administration's plan to freeze federal loans, grants, and other financial assistance on Monday.
The decision comes amid concerns that the administration is continuing to implement the freeze despite a temporary halt issued last week by her and a Rhode Island judge, following a legal challenge from a coalition of advocacy organizations.
Why It Matters
The freeze was announced by Matthew J. Vaeth, the acting director of the Office of Management and Budget, on Monday. The effort aims to stop government funding for causes that do not align with President Donald Trump's agenda.
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The freeze was scheduled to begin at 5 p.m. EST on Monday.
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What To Know
In her ruling, AliKhan granted a temporary restraining order (TRO) against the Office of Management and Budget (OMB) and denied the administration's motion to dismiss the case.
The judge found that the OMB's memorandum directing federal agencies to pause all financial assistance was likely arbitrary and capricious, stating that the administration "offered no rational explanation for why they needed to freeze all federal financial assistance—with less than twenty-four-hours' notice—to 'safeguard valuable taxpayer resources.'"
"For many, the harms caused by the freeze are non-speculative, impending, and potentially catastrophic," said AliKhan, who was appointed by President Joe Biden.
She also noted that organizations dependent on federal funding faced "existential injuries," adding that "each day that the pause continues to ripple across the country is an additional day that Americans are being denied access to programs that heal them, house them, and feed them."
Despite the OMB's earlier rescission of the memo initiating the freeze, AliKhan pointed to evidence suggesting that agencies continued to block funds. She criticized the administration's actions, saying: "Destroying the paper trail of allegedly illegal activity means nothing if the activity persists."
Although a memo outlining the funding pause was rescinded, the Trump administration maintains that the freeze aligns with his broader agenda of executive actions, including efforts to boost fossil fuel production, roll back protections for transgender people, and dismantle diversity, equity, and inclusion initiatives.
In a separate case, a judge in Rhode Island issued a temporary order on Friday blocking the administration from halting federal funding following a lawsuit filed by nearly two dozen Democratic-led states. Democrats argued that the president had no right to stop spending money appropriated by Congress unilaterally.
Trump officials said the freeze wouldn't affect programs like Medicare, Social Security, student loans and food stamps but gave mixed messages about the full impact.
What People Are Saying
Matthew J. Vaeth, acting director of the Office of Management and Budget, in a memo released Monday: "Federal agencies must 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."
Jessica Morton, a lawyer for the National Council of Nonprofits, at a hearing: "The chaos caused by the complexity and the ambiguity of OMB's supposed guidance has already caused questions in the public."
What Happens Next
The judge ordered the administration to notify all federal agencies of the TRO and to release any disbursements that had been paused. The legal battle reflects growing tension over the administration's efforts to restrict funding tied to programs such as diversity, equity and inclusion initiatives, foreign aid and environmental projects, which critics argue exceed executive authority and undermine congressional control over federal spending.
Update 2/3/25, 1:29 p.m. ET: This article was updated with additional information.
Update 2/3/25, 5:47 p.m. ET: This article was updated with additional information.
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