A federal judge in Providence, Rhode Island, reaffirmed his commitment on Thursday, February 6 to enforce a temporary restraining order blocking the Trump administration’s attempt to freeze federal grants and loans, as Democratic-led states report billions in funding remains inaccessible.
U.S. District Judge John McConnell, during a virtual court hearing, addressed concerns from 22 states and the District of Columbia that state agencies still couldn’t access federal funds nearly a week after his January 31 order. The situation developed after the White House’s Office of Management and Budget (OMB) had issued and then rescinded a directive announcing a widespread funding freeze.
Rabia Muqaddam, a lawyer representing New York Attorney General Letitia James’ office on behalf of the other states, stated that the defendants have communicated their belief that certain funds, such as the billions of dollars from the infrastructure legislation and the Inflation Reduction Act, are not subject to the TRO.
Judge McConnell, an Obama appointee, emphasized his position, saying, “If you do want me to act on that concern – rightful concern I understand on behalf of your clients − then get something before me and we will figure out how to deal with it quickly.”
The legal challenge emerged after the Trump administration initially issued OMB Memorandum M-25-13 on January 27, which ordered federal agencies to pause financial assistance programs. While the memo was rescinded on January 29, the White House indicated that executive orders regarding federal funding would remain in effect. The original freeze affected thousands of federal programs, including development assistance, climate change initiatives, and diversity programs.
Among the most significantly impacted areas are environmental programs. The EPA’s Solar For All program, funded through the Inflation Reduction Act’s Greenhouse Gas Reduction Fund, remains frozen, disrupting solar projects and programs across the country. The program was designed to deliver residential solar to low-income and disadvantaged households.
The freeze has created widespread confusion among federal agencies, educational institutions, and nonprofits that receive federal funding. The White House clarified that “direct assistance” programs like Section 8 rental assistance would not be impacted, but funding for other Housing and Urban Development programs, including the HOME Investment Partnership Program, faced potential freezes.
Senate Minority Leader Chuck Schumer claimed the administration had rescinded the freeze due to the “outcry across America” and political pressure on the White House. However, despite the rescission, state agencies report continued difficulty accessing funds.
The U.S. Justice Department acknowledged in a Wednesday court filing that some federal agencies were still working to begin disbursing “appropriate” funding but claimed no awareness of ongoing implementation of the OMB memo’s directives. Judge McConnell has scheduled a February 21 hearing to consider issuing a longer preliminary injunction.
Legal experts note that while agencies cannot pause funding based on the rescinded memo or executive orders, they may exercise their authority to pause awards or obligations if done based on their own discretion and in compliance with applicable laws. The situation continues to evolve as federal agencies navigate the complex legal landscape surrounding the funding freeze.