Examiner #2 - Federal Funds Update

Update on the Federal Freezing of Funds

From our previous email, we shared information regarding the executive order pausing the freeze of federal funds. These funds were authorized by Congress, which is the branch of government responsible for distributing federal dollars, yet through the executive order have not been distributed yet.

U.S. District Judge Loren L. AliKhan extended an order she issued previously that paused a

sweeping plan to freeze potentially trillions in federal spending. While the memo outlining it has since been rescinded, President Trumps administration has said some kind of funding freeze is still planned as part of his blitz of executive orders.

Also, a U.S. District Chief Judge John McConnell of Rhode Island granted the request for a

temporary restraining order sought by the Democrat-led states, which had argued that the actions from the Office of Management and Budget violated federal law and the Constitution.

In the most recent Washington lawsuit, several non-profit groups and organizations reported

being unable to access the promised federal funding even after the memo was rescinded. They ranged from childcare in Wisconsin to disability services in West Virginia to a small business research project on neutron generation and detection.

The judge wrote that the budget office did not cite any legal authority that allowed it to

unilaterally suspend the flow of federal funds to states and other entities and said, "no federal law would authorize the executive's unilateral action here."

"The states have set forth facts showing that the executive's abrupt 'pause' in potentially trillions of dollars of federal funding will cause a ripple effect that would directly impact the states and other's ability to provide and administer vital services and relief to their citizens," McConnell wrote.

The Trump administration argued a brief pause in funding was needed to align federal spending with the president’s agenda is within the law, and the court lacks constitutional authority to block it. President Donald Trump’s executive orders have sought to increase fossil fuel production, remove protections for transgender people and end diversity, equity and inclusion efforts.

Organizations received an ominous note from the payment processing arm of the U.S.

Department of Health and Human Services. Citing “Executive Orders regarding potentially

unallowable grant payments,” the agency said that it would continue “taking additional measures to process payments” and that its reviews “will result in delays and/or rejections of payments.”

The Trump administration is not backing down in its fight to slash spending and dramatically

reshape the federal government, despite multiple court orders explicitly restraining the

president’s sweeping executive actions. In some cases, to get around the judges’ rulings, the

administration has cited a memo that it says is not subject to the existing orders. In others, it

denied funding to organizations because their granting agencies are not defendants in one of the ongoing legal challenges. In others still, it has withheld funds by citing the agencies’ own judgment, not the president’s directives.

The Trump administration has been arguing that it is making “good-faith, diligent efforts to

comply with the injunction” and that to the extent the court does not agree with the government’s interpretation of the order, it should clarify “the intended scope of its temporary restraining order.”

On Monday, the judge overseeing that case, John J. McConnell Jr., did just that, ruling that

the Trump administration had violated his restraining order by keeping funds frozen. He wrote that the government’s “broad categorical and sweeping freeze of federal funds” was “likely unconstitutional” and that it must immediately restore funding across the board, unless it could show the court “a specific instance where they are acting in compliance with this order but otherwise withholding funds due to specific authority.”

It would appear that we are in the midst of a battle of wills and power between our federal courts and the Trump administration.

That is all for now, we will keep you apprised of any developments.

Respectfully,

Engage Women

Resources:

House.gov

The Brennan Institute

Southern Poverty Law Center