Federal Spending Freeze

 On February 3, 2025, US District Court Judge Loren AliKhan granted another Temporary Restraining Order (TRO) against the administration’s attempt to halt federal grants and loans. The ruling can be found here. In short:

• The U.S. Department of Justice (DOJ)’s motion to dismiss was denied.
• The Office of Management and Budget (OMB) is prohibited from implementing, giving effect to, or reinstating under a different name the directive to halt federal spending broadly.
• OMB must notify all federal agencies and instruct all such agencies to release any funding that was paused under the directive.

The next step is to file a Motion for Preliminary Injunction which would halt all actions covered in TRO for the duration of the case. This motion is due to the court February 11.

On February 11, it was reported by the Associated Press that the 1st US Circuit of Appeals rejected an appeal by the Trump administration to allow the funding freeze to be reinstated. Judge John McConnell (RI), presiding over the case brought by over a dozen Democratic states, found that not all federal grants and loans had been restored and found the Trump Administration had disobeyed a court order. (Money for early childhood education, pollution reduction, and HIV prevention research is still frozen.)

On February 13, Governor Shapiro announced that Pennsylvania has sued multiple federal agencies, saying that they are illegally and unconstitutionally withholding billions in federal aid from the states that has already been approved by Congress. Despite the fact that federal courts have repeatedly rejected the sweeping pause on federal funding, Shapiro argues that the Trump administration is continuing to ignore court orders. According to Shapiro: “As of February 12, 2025, despite those multiple court orders, over $1.2 billion in federal funding owed to Pennsylvania agencies remains suspended – and more than $900 million in funding is now marked as requiring further (but unarticulated) federal agency review before reimbursement requests can be approved.”
The court complaint specifies the agencies as the Office of Management and Budget, the US Dept of the Interior, the US Environmental Protection Agency, the US Dept of Energy, and the US Dept of Transportation.
On February 24, Governor Shapiro announced that all Federal Funding for Pennsylvania identified in his lawsuit has been released.

On February 25, US District Court Judge Loren AliKhan granted a preliminary injunction of the OMB’s freeze on federal grant disbursements in the NCN v OMB case. As of March 10, the Dept of Justice has not yet appealed.

On March 6, in a separate case from NCN v OMB, US District Court Judge John McConnell (RI) also granted a preliminary injunction of the OMB’s freeze on federal grant disbursements. This case, brought by 23 state attorneys general and the District of Columbia, is broad and stops the Administration from “reissuing, adopting, implementing, or giving effect to, or reinstating under a different name the directives of the OMB Memo with respect to disbursement and transmission of appropriated federal funds to the States under awarded grants, executed contracts, or other executed financial obligations.” In the order, the judge addressed separation of powers, appropriations and spending, the Impoundment Act, and other constitutional and federal claims as well as outlined many examples of harms caused by the freeze ranging from childcare to education to public safety and emergency preparedness.

On March 13, 2025, National Council of Nonprofits filed a second lawsuit against the administration to address funds being held up by the Departments of Agriculture, Energy, Housing and Urban Development, Interior, Environmental Protection Agency, and the Office of Management and Budget. The lawsuit, filed in the U.S. District Court for the District of Rhode Island by Democracy Forward and co-counsel DeLuca, Weizenbaum, Barry & Revens, challenges the administration’s arbitrary and capricious decision to suspend billions in funding in violation of the Administrative Procedure Act.