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Trump’s federal aid freeze ‘ill-conceived’: US judge continues to block move | Scoop

Trump’s federal aid freeze ‘ill-conceived’: US judge continues to block move

Court finds that it would be ‘economically catastrophic’ or ‘sometimes fatal’ to NGOs, despite directive memo being rescinded two days after it was issued

10:21 AM MYT

 

KUALA LUMPUR – A US federal judge has continued to block President Donald Trump’s administration’s attempt to freeze federal assistance, calling the move “ill-conceived from the beginning.” 

Judge Loren AliKhan ruled in favour of a coalition of nonprofit organisations, which challenged the White House budget office’s directive to halt all federal grants, loans, and assistance programmes. The judge found that the funding freeze would have been “economically catastrophic – and in some circumstances, fatal” to the plaintiffs. 

“While turning off funding streams appears to have been alarmingly easy, turning them back on has proven much more difficult,” the judge noted in the ruling.

The Trump administration had initially issued a memo on January 27, instructing federal agencies to pause all financial assistance. The directive sparked confusion and legal challenges, leading to a temporary restraining order by judge AliKhan. 

Though the memo was rescinded two days later, nonprofits and Democratic-led states continued to argue that federal agencies were still implementing the freeze.

AliKhan’s ruling indefinitely blocks the administration from reinstating the policy under a different name, saying that the government “may be crossing a constitutional line.” 

“Defendants either wanted to pause up to US$3 trillion in federal spending practically overnight, or they expected each federal agency to review every single one of its grants, loans, and funds for compliance in less than 24 hours. The breadth of that command is almost unfathomable,” she wrote.

The suit was filed by the National Council of Nonprofits, SAGE (a pro-LGBTQ advocacy group for older adults), the American Public Health Association, and small-business group Main Street Alliance. They are represented by Democracy Forward, a legal organisation that has frequently challenged Trump in court.

According to The Hill, plaintiffs’ lawyer Kevin Friedl argued in court that the freeze was a deliberate tool to force ideological change in federal spending. 

The Trump administration, however, insists the case is now irrelevant, since the memo was rescinded. 

“A general interest in carrying out a policy is not enough to keep a case alive,” Justice Department lawyer Daniel Schwei argued. He also maintained that it was reasonable for a new administration to temporarily pause funding while reassessing priorities.

The legal battle has extended beyond the nonprofit suit. A coalition of Democratic state attorneys general, led by New York Attorney-General Letitia James, sued the White House budget office over the directive. 

In a separate case, another federal judge found that the administration had not complied with a previous ruling to reinstate withheld funds and ordered it to do so. CBS reported that Pennsylvania Governor Josh Shapiro also filed a suit, claiming the administration was still suspending grants despite court orders. – February 26, 2025

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