A US judge has temporarily paused part of the Donald Trump’s sweeping directive to pause federal loans, grants and other financial assistance, granting a win to advocacy groups who said the policy would be devastating.
The President’s plan to freeze loans and grants caused widespread panic among local governments, schools and nonprofit organizations for whom federal finance is a lifeline.
Administration officials said the decision to halt loans and grants was necessary to ensure that spending complies with Trump’s recent blitz of executive orders, including increasing fossil fuel production, removing protections for transgender people and ending diversity, equality and inclusion efforts.
The order to pause the funding freeze came minutes before it was due to take effect.
At a hearing in Washington, D.C., federal court, US District Judge Loren AliKhan ordered the Trump administration not to block “open awards,” or funds that were already slated to be disbursed, until at least Feb. 3.
The judge said her temporary ruling was intended to “maintain the status quo.”
It does not block the Trump administration from freezing funding to new programs, or require it to restart funding that has already ended.
AliKhan scheduled another hearing for Monday at 3pm (GMT) to determine the next steps.
The National Council of Nonprofits, the American Public Health Association, Main Street Alliance and SAGE earlier on Tuesday sued over the directive issued by the acting head of the Office of Management and Budget on Monday.
The groups said OMB lacked authority to unilaterally terminate all federal financial assistance programs across the government, and that the directive targeted grant recipients based in part on recipients’ rights to free expression and association under the U.S. Constitution’s First Amendment.
Matthew Vaeth, OMB’s acting director, said the money would be put on hold while the administration of Republican President Donald Trump reviews grants and loans to ensure they are aligned with the president’s priorities, including executive orders he signed ending diversity, equity and inclusion programs.
Separately, states including New York, California and Massachusetts said they will file a lawsuit targeting the directive.
Additional reporting by Reuters
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