A federal judge issued a temporary stay on President Donald Trump’s executive order directing the Office of Management and Budget to pause federal grants and loans.
The OMB order was met with immediate backlash and legal challenges from nonprofits, public health organizations and small business advocacy groups, leading to an emergency ruling from the U.S. District Court for the District of Columbia.
The two-page memo at the center of the confusion states that to the “extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
U.S. District Judge Loren L. Alikhan issued the stay and said the funding pause could irreparably harm organizations and programs that depend on the government for assistance.
The ruling temporarily blocks OMB from pausing disbursements on funds already obligated while the legal proceedings continue. However, this does not prevent the Trump administration from pausing funding for new awards and funding reviews under the Memo.
Documents show the plaintiffs alleged that the implicated federal grants and funding “are the lifeblood of operations and programs for many … nonprofits, and even a short pause in funding … could deprive people and communities of their life-saving services.”
The temporary stay will remain in effect until 5 p.m. on Feb. 3, when a hearing will determine whether a longer injunction is necessary.
The plaintiffs requested a temporary restraining order “to maintain the status quo” until the court can “more fully consider the illegality of OMB’s actions.”
According to court documents, the plaintiffs argue that the freeze lacks legal authority and violates The Administrative Procedure Act, which governs how federal agencies create and enforce regulations.
Plaintiffs, including the National Council of Nonprofits, American Public Health Association, and Main Street Alliance, argue that the pause jeopardizes essential services.
The White House defended the freeze and stated it does not qualify under the Impoundment Control Act of 1974, which limits presidents’ authority when withholding or delaying congressionally approved funds, and noted that the pause is a temporary measure to ensure taxpayer dollars align with presidential priorities, as previously reported by The Center Square.
The White House must respond to the lawsuit by Thursday and the plaintiffs have until Jan. 31 to file a reply.
