[Source: Reuters]

A U.S. judge on Monday extended a pause on the Trump administration’s plan to freeze federal loans, grants and other financial assistance, saying it may have “run roughshod” over Congress’s constitutional authority over government spending.

U.S. District Judge Loren AliKhan in Washington wrote, opens new tab that a funding freeze outlined in a memo from the White House budget office last week would be “potentially catastrophic” for organizations that rely on federal funding to carry out their missions and provide services to the public.

Her ruling, issued at the request of several advocacy groups, meant the policy is now subject to two temporary restraining orders. A federal judge in Rhode Island on Friday issued a similar order at the behest of Democratic attorneys general from 22 states and the District of Columbia.

AliKhan had last week ordered a short, administrative pause preventing the Office of Management and Budget (OMB) from moving forward with its policy while she considered whether to issue the longer temporary restraining order.

OMB in its memo had said the funding freeze was necessary to ensure funding complied with President Donald Trump’s executive orders on immigration, climate change, diversity and other issues.

After first trying to clarify the funding pause, OMB then fully withdrew its memo on Wednesday. The Republican president’s administration had argued the withdrawal should have had the effect of ending the lawsuit before AliKhan by a group of advocacy organizations.

But the judge, an appointee of Trump’s Democratic predecessor Joe Biden, said a temporary restraining order was still necessary because funding problems remained and because there was nothing stopping OMB from reissuing the policy.

She said “furthering the president’s wishes cannot be a blank check for OMB to do as it pleases.” OMB’s memo implicated as much as $3 trillion in financial assistance, she said, “a breathtakingly large sum of money to suspend practically overnight.”

The policy appeared arbitrary and may have run afoul of Congress’ authority over government spending under the U.S. Constitution, the judge said.

Her order will remain in place while she considers whether to issue an even longer preliminary injunction. The U.S. Department of Justice, which is defending the Trump administration’s policies in court, declined to comment.
AliKhan’s decision was hailed by Diane Yentel, the head of the National Council of Nonprofits, which had sued last week alongside several other groups to block what she said would have been a “reckless attempt to halt funding.”

During a hearing on Monday, a lawyer for the advocacy organizations said some recipients of federal grants were still struggling to access funding despite the memo’s withdrawal and the order issued on Friday by the Rhode Island judge.