Judge halts Trump's freeze on federal grants and loans
2025-01-29
Category: news

A US judge temporarily halted President Donald Trump's order to freeze hundreds of billions of dollars in federal grants and loans, minutes before it was set to come into effect on Tuesday.Judge Loren AliKhan's order to pause the plan until next Monday at 17:00 EST (22:00 GMT) came in response to a lawsuit filed earlier in the day by a group of organisations representing grant recipients.The lawsuit claims the White House's temporary freezing of already approved funding violates the law.In the hours before the order was due to take effect, there was widespread confusion about which agencies and programmes would be impacted.
The acting head of the White House budget office had instructed agencies to "temporarily pause all activities related to obligations or disbursement of all federal financial assistance".It said the move was intended to give the new administration time to assess what grants and loans were in step with their agenda. White House Press Secretary Karoline Leavitt said Trump's plan to pause billions of dollars in US government funding was about being "good stewards of tax dollars".Speaking to reporters in her first ever briefing, she said the pause in funding would allow governments to cut back spending for "woke" gender issues and diversity programmes. But it prompted confusion, as well as anger from opposition figures, on Tuesday as those who receive federal loans and grants - such as non-profits and research organisations - reckoned with the reality of swiftly losing funding.Judge AliKhan on Tuesday said she was issuing a brief stay that would "preserve the status quo" until she can hold an oral argument, now set for Monday morning.The White House directive could have impacted billions of dollars meant for federal programmes, from disaster relief to cancer research.In a post on X, Diane Yentel, the president of the National Council of Nonprofits, the organisation that brought the lawsuit, celebrated the ruling. "Our lawsuit was successful - the US district court is blocking OMB (Office of Management and Budget) from moving forward on its reckless plan to halt federal funding," she wrote. In the lawsuit, her organisation wrote that Trump's order seeks to "eradicate essentially all federal grant programs".
It argues that Trump's order is "devoid of any legal basis or the barest rationale" and will have ripple effects throughout the entire United States and beyond.This is separate from an action by a coalition of Democratic states who filed a lawsuit later on Tuesday to block the order, calling it unconstitutional.Stephen Miller, the White House's deputy chief of staff, also defended the directive before the judge's decision was announced, telling reporters that this would allow the government to get "credit control"."It does not impact any federal programmes that Americans rely on," he said, answering a question about whether "Meals on Wheels" food delivery programme would be affected. On Tuesday, several states reported issues accessing funds through Medicaid, a government health insurance programme for low-income people. The White House later said the programme would not be affected and that the problem would be resolved soon.It also said Social Security benefits would not be affected, nor would any programme "that provides direct benefits to individuals", including Supplemental Nutrition Assistance Program, known as SNAP or food stamps.In a letter to the White House, top Democrats expressed "extreme alarm" about the plan to pause funding."The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country," wrote Washington Senator Patty Murray and Connecticut Congresswoman Rosa DeLauro.Democratic minority leader of the US Senate, Chuck Schumer, said the move would cause missed payrolls and rent payments, and cause "chaos".