In a major rebuke to the Trump administration’s fiscal policies, a federal judge on Tuesday indefinitely blocked a directive that sought to freeze up to $3 trillion in federal funding. The ruling, issued by U.S. District Judge Loren AliKhan, effectively halts the White House’s efforts to realign government spending with President Trump’s broader agenda.
AliKhan’s ruling prevents the administration from reinstating the funding freeze “under a different name” while the court reviews its legality. The freeze, which was implemented by the Office of Management and Budget (OMB), was challenged by a coalition of nonprofits, arguing it placed critical public services in jeopardy.
“In the simplest terms, the freeze was ill-conceived from the beginning,” AliKhan wrote in her decision. “The breadth of that command is almost unfathomable.”
The lawsuit was filed by the National Council of Nonprofits, SAGE (a pro-LGBTQ advocacy group for older adults), the American Public Health Association, and the small-business group Main Street Alliance. The plaintiffs, represented by the legal organization Democracy Forward, argued that the freeze disproportionately affected vulnerable populations and was an attempt to use federal funding as a political tool.
Though the OMB memo that originally ordered the freeze was later rescinded, the plaintiffs contended that the administration continued to pursue similar policies under different pretexts. White House press secretary Karoline Leavitt fueled those concerns by stating on social media that only the memo itself had been rescinded, not the broader funding freeze.
Kevin Friedl, a lawyer for the plaintiffs, argued last week that the administration was using funding as leverage. “It’s an administrative priority to end wokeness, and they’re backing that with this cudgel of withholding billions — perhaps trillions — in funding,” he said.
The Justice Department countered that the case was moot since the memo had been withdrawn. DOJ attorney Daniel Schwei argued that a new administration has the right to reassess spending priorities and dismissed concerns about future freezes as speculative.
However, Judge AliKhan strongly disagreed, emphasizing the real-world harm caused by the funding halt. “Many organizations had to resort to desperate measures just to stay operational,” she wrote. “The pause placed critical programs for children, the elderly, and everyone in between in serious jeopardy.”
The ruling marks a significant legal setback for Trump’s broader efforts to reshape federal spending. Separate lawsuits from Democratic state attorneys general and Pennsylvania Gov. Josh Shapiro are also challenging the administration’s handling of federal funds. Another judge had previously ordered the government to unfreeze grants, but found the administration had failed to comply, citing Leavitt’s comments as evidence of a “reversal in name only.”
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