Temporary Pause on Federal Funding Freeze

A federal judge, Loren Ali Khan, issued an administrative stay on Tuesday, temporarily halting a Trump administration directive to freeze the disbursement of existing federal grants and loans. The stay delays the order’s implementation until February 3, allowing time for legal challenges to be heard.

Legal Action and Stakes

The decision came minutes before the directive was set to take effect at 5 p.m. ET. At risk are federal funds worth billions of dollars. The judge’s stay applies only to funds already authorized, not pending applications. Plaintiffs argue that the freeze could cause severe disruption to grant programs, nonprofits, and small businesses relying on federal support.

Widespread Legal Challenges

Just after the stay, a coalition of 22 states and the District of Columbia filed a separate lawsuit in Rhode Island federal court, contesting the legality of the freeze. The memo behind the directive calls for a “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs” to align federal funding with Trump’s policies, including opposition to “woke ideology” and the Green New Deal.

Impact on Nonprofits and Communities

Jessica Morton, representing plaintiffs, emphasized the “chaos” the freeze would create for organizations reliant on federal funding. Diane Yental, CEO of the National Council of Nonprofits, noted that smaller organizations would be unable to cover payroll or maintain operations if payments are delayed.

Advocacy Groups Respond

Skye Perryman, CEO of Democracy Forward, stated that her organization would continue to fight against the directive, describing it as harmful and unlawful. The next hearing is scheduled for Monday morning to decide whether a temporary restraining order will be granted.