A federal judge temporarily halted the Trump administration’s confusing and sudden freeze on federal aid just minutes before it was set to take effect Tuesday afternoon at 5 p.m., pushing back the pause in spending until at least next Monday.
U.S. Judge Loren L. AliKhan made the decision from the bench during a brief court hearing over Zoom in Washington, D.C., following concerns expressed by attorneys representing a group of nonprofits that fear they could face sudden stoppages in their work.
The decision marks the second time in a week that President Donald Trump’s federal policy agenda has been met with a sudden legal whiplash. His Day One executive order attempting to end birthright citizenship was blocked by a Seattle federal judge who decided it was “blatantly unconstitutional” in the way it aimed to unravel the 14th Amendment through presidential power alone.
This latest round of bureaucratic chaos in Washington began Monday evening, when The Washington Post reported the existence of a federal memo titled “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs.” The two-page memo written by Office of Management and Budget acting Director Matthew J. Vaeth notified all federal agencies that “the use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”
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Four groups, including the National Council of Nonprofits, sued OMB Tuesday morning and asked a federal judge to block the measure, citing what it called “a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent — and, indeed, improve the day-to-day lives of the many people they work so hard to serve.”
Tuesday afternoon, the Department of Justice countered and asked the judge to hold back from intervening. The court filing noted the existence of a second OMB memo in what appeared to be a subtle acknowledgment that the first memo was overly vague.
“On January 28, 2025, OMB issued further guidance about the scope of that temporary pause, confirming that ‘the pause does not apply across-the-board’ and implicates only those programs subject to certain Executive Orders,” lawyers wrote.
The court filing was signed by three DOJ lawyers, two of whom appear to be recent political hires.
This second OMB memo, filed in court records by the DOJ, read like an FAQ — one that appeared to anticipate legal challenges on the grounds that Trump’s threats ignore congressional spending approvals and could potentially violate the Impoundment Control Act.
“Q: Is the pause of federal financial assistance an impoundment?” it asks.
“A: No, it is not an impoundment under the Impoundment Control Act. It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the president’s executive orders, to the extent permitted by law,” it says.
The memo also stressed that “the pause does not apply across-the-board” and would not affect long-standing federal benefits like Social Security and Medicare, further clarifying that “mandatory programs like Medicaid and SNAP will continue without pause.”
The memo goes on to argue that the pause is “necessary,” reasoning that “to act as faithful stewards of taxpayer money, new administrations must review federal programs to ensure that they are being executed in accordance with the law and the new president’s policies.”
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Jose Pagliery is a reporter at NOTUS.
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