A federal judge in Rhode Island late on Jan. 31 issued a temporary restraining order barring the Trump administration from freezing federal funding, following a similar action taken Jan. 27 by a Washington, D.C.-based judge in ordering a temporary hold on execution of an Office of Management and Budget directive to pause fund awards for review, which the White House cancelled one day later.
The administration "shall not pause, freeze, impede, block, cancel or terminate ... compliance with awards and obligations to provide federal financial assistance to the States,” said U.S. District Court Judge John J. McConnell in his order. The ruling was in response to a suit filed by attorneys general in 22 Democratic-run states and Washington, D.C. to stop any interruption of congressionally mandated or approved money to state and local entities, as noted in a flurry of post-inauguration executive orders by Donald Trump.
“The Executive Branch has a duty to align federal spending and action with the will of the people as expressed through congressional appropriations, not through ‘Presidential priorities,'" McConnell stressed. The ruling also prevents all federal agencies from “otherwise giving effect to the OMB directive under any other name or title.”
That concern was based, in part, by a social media post on Jan. 28 by White House spokesperson Karoline Leavitt that the canceled OMB directive "is NOT a rescission of the federal funding freeze.” She also stressed that executive orders calling for more review of "federal funding remain in full force and effect, and will be rigorously implemented.”
Potentially affected are small business loans, and state and local government grants and loans awarded under the Inflation Reduction Act and Infrastructure Investment and Jobs Act that include federal climate, renewable energy, disaster assistance, environmental justice, tax credit and other programs. Additional possible targets could include oil and gas orphan well cleanups and U.S. hydrogen production and research boosted by $7 billion in Biden Administration funding awarded to seven new public-private hubs.
Potential targets are noted in an OMB released list of federal programs set for review.
McConnell said states have demonstrated “at this stage that they will likely suffer severe and irreparable harm” from allowing the funding freeze to continue, including impacts to highway and other construction programs and to federal disaster relief efforts such as in North Carolina, for rebuilding after Hurricane Helene last fall, and in California, for cleanup and reconstruction of Los Angeles areas affected by devastating wildfires.
Responding to administration claims that canceling the OMB directive made the restraining order request unnecessary, McConnell said the “alleged rescission … was in name-only and may have been issued simply to defeat the jurisdiction of the courts. The substantive effect of the directive carries on.” He added: “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 order is in effect until the judge rules on states' request for a preliminary injunction, to be filed “expeditiously,” McConnell said
“Today’s court decision reaffirms that the President cannot unilaterally take away federal funding," said Andrea Campbell, attorney general of Massachusetts, one lawsuit plaintiff. Others are New York, California, Illinois, New Jersey, Rhode Island, Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Vermont, Washington, Wisconsin and Washington, D.C.
In its motion challenging the states, the U.S. Justice Dept. claimed the Rhode Island federal court lacked jurisdiction, adding that Trump and OMB “plainly have authority to direct agencies to fully implement the President’s agenda, consistent with each individual agency’s underlying statutory authorities.” Brett Shumate, acting assistant attorney general, said that authority "is well-established.”
