A federal judge said Monday that she will not make any changes to the temporary block on the Trump administration’s bid to freeze federal grants and loans, a maneuver that has impacted funding for everything from special education needs to veterans’ care to Meals on Wheels and more.
The temporary block on the funding freeze expires Monday at 5 p.m. If the order expires, the freeze would go back into effect.
After a roughly two-hour hearing, U.S. District Judge Loren AliKhan told Justice Department prosecutors and attorneys for the National Council of Nonprofits that she would not issue her decision to extend the temporary restraining order on the freeze until the parties had formally entered additional records onto the docket.
“I appreciate the expedited briefing,” AliKhan said after acknowledging to prosecutors that the whirlwind of activity that has hit her court since last week seemed to be a problem of the Trump administration’s “own making” since they “paused all federal funding as opposed to going through it [line by line].”
On Jan. 27, the Office of Management and Budget issued a memo requiring federal agencies to identify whether the programs that received government dollars were aligned with the new administration’s policies and executive orders — specifically, those that sought to limit assistance for foreign aid, diversity, equity and inclusion, or DEI, efforts, and “woke gender ideology.”
In the memo, Matthew Vaeth, acting director of the OMB, wrote that the use of government resources “to advance Marxist equity, transgenderism, and the green new deal is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
The blowback was immediate, with nearly two dozen states filing lawsuits requesting that the courts step in. AliKhan in Washington, D.C., was the first to enter a temporary stay on the OMB memo. Another judge in Rhode Island also agreed to temporarily block the OMB’s directive from going into effect.
The OMB rescinded its memo on Jan. 29, though White House press secretary Karoline Leavitt said at the time that the rescission was “not a revision of the federal funding freeze” but of the OMB memo itself.
However, Kevin Friedl, the attorney representing impacted nonprofits, said he was still getting sworn declarations from people or organizations who said their funds are stuck.
AliKhan acknowledged this during proceedings on Monday, saying that as recently as Sunday night, organizations that were “completely divorced” from President Donald Trump’s executive orders had informed the court that they still could not reach their funds.
This, AliKhan said, “suggests to me OMB is doing some independent work despite the memo being rescinded.”
“I think the irreparable harm is catastrophic to agencies and organizations designed to further the public interest, and we see that with individual declarations from organizations that have nothing to do with the executive orders but [organizations] that do things like install wheelchair ramps,” AliKhan continued.
Those groups may be forced to lay people off or potentially collapse altogether if they don’t receive funds, she added.
Friedl said there are multiple pauses in funding that “can’t be explained.”
For instance, he said, a small business that does scientific research and development has its funds on ice. The administration’s order never suggested that physics research was “somehow connected to wokeness or Marxist equity,” Friedl said.
The Trump administration has “never come forward” to offer an explanation for many of the other freezes, Friedl added.
U.S. attorney David Schwei tried to convince the judge the case was moot because the OMB memo was not a direction to pause funding but rather a direction to agencies to consider a pause on programs. It was not arbitrary nor capricious, he argued.
It wasn’t overreach or a violation of anyone’s First Amendment rights either, Schwei added, pointing to the Biden administration’s use of an executive order in 2021 to immediately pause funding for the construction of a wall at the U.S.-Mexico border.
Schwei argued the Trump administration had not caused “irreparable harm” because people who find themselves unable to access funding as a result of the OMB memo could always raise their claims to the court.
AliKhan suggested she didn’t think this was a very logical or useful plan, noting to the prosecutor that his recommendation would mean the court would become deluged in individual complaints.
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Friedl told the court the injuries to people or organizations who have seen their funding upended were significant and potentially posed a long-term chilling effect.
One person who signed a sworn declaration about those harms pointed out that freezing of their funds left them to question if they were being targeted for their personal beliefs or opinions, Friedl said. He added that the person wondered whether the mark against their name or company would remain into the future.