Judge temporarily halts Trump’s federal spending freeze

A federal judge in the District of Columbia Tuesday blocked for a few days the Trump administration’s order late Monday to freeze the disbursement of federal funds that stunned states, cities, nonprofit organizations and others.

Judge Loren AliKhan ordered a temporary stay after a coalition of nonprofit groups, including the National Council of Nonprofits, American Public Health Association and Main Street Alliance, filed a lawsuit to stop the freeze. The groups argued the Office of Management and Budget’s memo exceeded its authority and violated the Administrative Procedure Act and the First Amendment.

“In practice, the memo purports to eradicate essentially all federal grant programs,” the lawsuit states.

The judge ruled just minutes ahead of the 5 p.m. start of the freeze, capping a chaotic day in which stakeholders grappled with the implications of the OMB directive and the Trump administration attempted to clear up confusion with additional guidance and statements.

The judge’s order expires on Feb. 3. Another hearing is scheduled for that day. The administration cannot halt the disbursement of federal funds until then.

Because the stay “in this case blocks executive action — a consideration that is not to be taken lightly — the court will limit its duration to only the few days it will take for expedited briefing and a hearing,” AliKhan said.

Also Tuesday, a group of 22 Democratic states and the District of Columbia filed a lawsuit in Providence, R.I. seeking to block the executive action.

The states argued that the OMB order would allow the government to claw back “allocated dollars that have been included in recipient budgets — monies that are otherwise necessary for the plaintiffs to ensure that their residents have quality healthcare, the protections of law enforcement, the benefit of safe roads, and assistance in the aftermath of natural disasters, among many other key services,” the complaint said.

“Without this funding, plaintiff states will be unable to provide certain essential benefits for residents, pay public employees, satisfy obligations, and carry on the important business of government.”

The court action came as the White House attempted to address confusion by issuing additional guidance and saying the move was only aimed at ensuring that federal funds do not conflict with any of Trump’s numerous executive orders that pertain to issues like abortion, immigration, clean energy projects and diversity, equity and inclusion programs.

“Any program not implicated by the President’s executive orders is not subject to the pause,” the additional OMB guidance issued Tuesday highlighted in bold text. “A pause could be as short as one day. In fact, OMB has worked with agencies and has already approved many programs to continue even before the pause has gone into effect.”

It added that “any payment required by law to be paid will be paid without interruption or delay.”

The guidance also said the action did not qualify as an impoundment under the Impoundment Control Act.

“It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President’s Executive Orders, to the extent permitted by law,” OMB said. “Temporary pauses are a necessary part of program implementation that have been ordered by past presidents to ensure that programs are being executed and funds spent in accordance with a new President’s policies and do not constitute impoundments.”

The administration also clarified that a number of programs would continue as before, including Medicaid, Supplemental Nutrition Assistance Program, federal student loans, Pell Grants, Head Start, Section 8 rental assistance, and aid to small businesses and farmers. The memo explicitly exempted direct aid to individuals and Medicare or Social Security.

The financial management system used by the Federal Highway Administration to reimburse states remains up and running as of Tuesday night, according to the American Road and Transportation Builders Association, although it wasn’t clear whether that was “because of the court order or interpretation of the OMB memo by officials at the U.S. Department of Transportation,” ARTBA said in an email to members.

The group said it expects additional clarification on transportation program funding soon. “There will likely be distinctions drawn between formula projects, which would continue largely uninterrupted, and those funded by discretionary grants, which could be subject to further reviews,” ARTBA said.