Judge Halts Trump Administration’s Suspension of Key Federal Payments

WASHINGTON — A federal judge has issued a temporary ruling that delays the Trump administration’s plans to pause numerous federal spending programs, including grants and loans. District Judge Loren L. AliKhan emphasized that the stay would last until at least the Feb. 3 hearing, though its future remains uncertain.

AliKhan’s order intervenes after the Office of Management and Budget (OMB) announced a freeze on payments late Monday, sparking confusion and frustration among Congressional members, including Republicans. The announcement raised concerns that the executive branch was undermining lawmakers’ constitutional authority to manage federal expenditures.

In her decision, Judge AliKhan highlighted the immediate impact of the decision, stating, “anything that was due to be paused as of 5 p.m. today to open funding on grants is stayed.” She pointed out that separate executive orders were not covered by this temporary stay. Both parties in the case are instructed to submit briefs later this week, with the hearing set for February 3 at 11 a.m. Eastern time.

Diane Yentel, president of the National Council of Nonprofits — one of the organizations that initiated the lawsuit — stated, “A lot more work to do in the courts … to ensure that this reckless action cannot move forward in the long term.”

At a press briefing, White House Press Secretary Karoline Leavitt attempted to mitigate concerns regarding the spending freeze. She assured reporters that it wouldn’t affect individual assistance programs like Social Security or SNAP benefits. However, she could not provide clarity on the freeze’s impact on Medicaid, even as reports emerged that Medicaid portals in all states were down.

Republican Senator Susan Collins expressed her support for reviewing federal spending but criticized the OMB’s approach as excessively broad and potentially harmful to essential services. “This is far too sweeping and will have an adverse effect on the delivery of services and programs,” Collins remarked, adding that programs such as Head Start were of particular concern.

The initial OMB memo indicated that the halt applied to a wide array of federal financial assistance programs. Although it stated that Medicare and Social Security benefits were exempt, it did not clarify the status of Medicaid.

The legal challenges to the spending freeze are mounting. Numerous organizations, including the American Public Health Association, have filed lawsuits against the administration. Democratic attorneys general from multiple states, led by New York AG Letitia James, are preparing to dispute the legality of the spending pause, claiming it violates the Constitution.

In the meantime, top Democrats on both the House and Senate Appropriations Committees sent a letter to the acting OMB Director, expressing alarm over the potential consequences of halting payments on programs that assist millions of Americans. They cautioned that the OMB’s scope poses a threat to Congress’s power over federal spending.

Article I, Section 9, Clause 7 of the Constitution grants Congress the authority to approve federal spending. The legal precedent established by the 1974 Impoundment Control Act states that the president cannot unilaterally refuse to spend appropriated funds. Despite this, the Trump administration has indicated a willingness to challenge this authority.

As confusion persists, many stakeholders are seeking clarity on how the funding freeze will affect crucial public services. Organizations reliant on federal funding are anxious about the operational implications of OMB’s memo. “This confusion isn’t a political game — real state, local, and tribal governments, school districts, and nonprofits can’t function without resources and clarity,” remarked Sharon Parrott, president of the Center on Budget and Policy Priorities.

Lawmakers expressed mixed reactions to the spending pause, with some voicing skepticism that it would cause immediate harm. Yet, committee leaders, including Senate Majority Leader John Thune, are calling for more detailed guidance from the administration to properly assess the situation.

As the situation develops, both sides brace for the upcoming hearing, preparing to address the complexities surrounding federal funding and the limits of executive authority.

Last updated 3:43 p.m., Jan. 28, 2025