A U.S. judge has extended a temporary pause on the Trump administration’s plan to freeze federal loans, grants, and other financial assistance, questioning its constitutionality. U.S. District Judge Loren AliKhan in Washington stated that the freeze, outlined in a White House memo, could be “potentially catastrophic” for organizations reliant on federal funds to provide public services. The policy is now subject to two restraining orders, with a similar ruling issued by a judge in Rhode Island.
The Office of Management and Budget (OMB) had issued the freeze to ensure compliance with Trump’s executive orders on immigration, climate change, and diversity. However, the memo was later withdrawn after confusion and backlash, including a lawsuit from several advocacy groups. Despite this, Judge AliKhan ruled that a temporary restraining order was still needed due to unresolved funding issues and the potential for the OMB to reissue the policy.
AliKhan highlighted that the freeze could affect up to $3 trillion in financial assistance, a sum “suspended practically overnight,” and could undermine Congress’s constitutional authority over government spending. The judge emphasized that the president cannot unilaterally direct such actions. Advocacy groups, including the National Council of Nonprofits, celebrated the decision, while the Justice Department defended the administration’s authority to set funding priorities under executive orders.
The ruling remains in effect while Judge AliKhan considers whether to issue a longer injunction.
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