A federal judge temporarily blocked the Trump administration from halting federal grants and loans after 22 Democratic attorneys general and the District of Columbia challenged the move. U.S. District Judge John McConnell ruled that despite the White House rescinding its Office of Management and Budget (OMB) memo, the policy remained in effect, calling the reversal "in name only."
New York Attorney General Letitia James praised the decision, stating it prevents the White House from disrupting essential government funding. The restraining order bars the administration from reissuing the directive under any other name while the case proceeds.
The White House had directed agencies to freeze funds while reviewing grants to align with Trump's executive orders, including ending diversity, equity, and inclusion programs. The Democratic attorneys general argued that withholding over $1 trillion in grants for healthcare, education, and transportation violated the U.S. Constitution and the 1974 Impoundment Control Act, which limits a president’s authority over congressional spending.
McConnell warned that allowing the freeze to continue could disrupt vital services nationwide, affecting millions. The ruling follows a separate court decision in Washington, D.C., where a judge temporarily paused the policy pending further review. A hearing on that case is scheduled for Monday.
Despite withdrawing the memo, the administration’s actions suggested the funding freeze was still in place. White House Press Secretary Karoline Leavitt reinforced this view in a post on X, stating, "This is NOT a rescission of the federal funding freeze."
The White House has not responded to requests for comment.