February 25 (Reuters) - A U.S. judge has extended an order preventing the Trump administration from implementing a comprehensive freeze on trillions of dollars in federal funding. This decision halts the suspension of grants, loans, and other financial support.
The judge, appointed by Democratic former President Joe Biden, sided with groups representing nonprofits and small businesses. She emphasized that the preliminary injunction was crucial in preventing potentially severe consequences. The judge noted, "The injunctive relief that defendants fought so hard to deny is the only thing in this case holding potentially catastrophic harm at bay."
These groups initiated legal action following a memo from the White House's Office of Management and Budget (OMB) on January 27. The memo directed federal agencies to temporarily halt spending on federal financial assistance programs. The stated purpose was to align these programs with Trump's executive orders, which included terminating diversity, equity, and inclusion initiatives and pausing climate change projects.
The OMB later withdrew the memo after it faced two lawsuits—one before Judge AliKhan and another in Rhode Island by Democratic state attorneys general. However, the plaintiffs contended that the withdrawal of the memo did not signify the cessation of the policy itself.
They referenced a social media post on X by White House Press Secretary Karoline Leavitt soon after the memo's withdrawal. The post stated, "This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo."
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Reporting by Nate Raymond in Boston; editing by Nick Zieminski.
Our Standards: The Thomson Reuters Trust Principles.
Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.
