Judge puts federal funding freeze on ice, finding Trump placed himself 'above Congress'

(CN) — A second federal judge on Thursday indefinitely stopped the Trump administration from enforcing a broad federal spending freeze outlined in a January memo from the White House’s budget office.

In a 45-page order, U.S. District Judge John McConnell — a Barack Obama appointee in Rhode Island — granted a preliminary injunction in favor of 23 states that sued the federal government over the controversial funding directive. He found that the freeze threatened constitutional fundamentals, like separation of powers and checks and balances, since it aims to block funding already approved by Congress.

“The executive’s categorical freeze of appropriated and obligated funds fundamentally undermines the distinct constitutional roles of each branch of our government,” McConnell said in his ruling.

McConnell had already issued a temporary block on the directive in January, finding that the funding freeze was likely unconstitutional and posed harm to a variety of organizations and programs reliant on federal cash. In extending that block on Thursday, the judge found that the Trump administration ultimately failed to point to any authority that would allow it to bypass Congress in such a drastic way.

“Here, the executive put itself above Congress. It imposed a categorical mandate on the spending of congressionally appropriated and obligated funds without regard to Congress’s authority to control spending,” McConnell ruled. “The executive has not pointed to any constitutional or statutory authority that would allow them to impose this type of categorical freeze.”

The judge cited the Impoundment Control Act of 1974, which provides that presidents have a narrow set of circumstances when they can lawfully withhold appropriated federal funds. The act also mandates that the executive notify Congress to explain the deferrals, which President Donald Trump apparently failed to do in this case.

McConnell also acknowledged the damage that the freeze would cause to the suing states, giving them the required standing to challenge the action.

“The states have introduced dozens of uncontested declarations illustrating the effects of the indiscriminate and unpredictable freezing of federal funds, which implicate nearly all aspects of the states’ governmental operations and inhibit their ability to administer vital services to their residents,” the judge ruled.

McConnell is the second federal judge to grant a preliminary injunction to indefinitely block the federal funding freeze. Last month, the Joe Biden-appointed U.S. District Judge Loren AliKhan blocked the freeze with a preliminary injunction in a separate lawsuit in Washington, D.C.

The directive to broadly freeze federal funding became public in a Jan. 27 memo from the White House’s budget office, which ordered federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the Green New Deal.”

The memo caused widespread panic nationwide, as uncertainty grew over what funding, specifically, might be at risk.

Shortly after the memo came to light, a coalition of 23 state attorneys general filed a lawsuit in Rhode Island federal court to block the freeze. The coalition accused the Trump administration of threatening “essential benefits” for its states’ residents, including health care, natural disaster relief and payment to public employees.

New York Attorney General Letitia James, one of the co-leaders of the lawsuit, celebrated McConnell’s ruling in a statement on Thursday.

“Today we secured another court order to block the administration’s funding freeze while our lawsuit progresses,” James said. “The power of the purse belongs to Congress — not the president. I will continue to fight to uphold our laws and protect the vital funding and programs that New Yorkers need.”

The scope of funding freeze is still not entirely clear. The Trump administration has claimed that it would strike programs that run afoul of the president’s agenda, such as those that support diversity, equity and inclusion efforts.

But even while the directive has been blocked in federal court in two jurisdictions, many organizations and state governments have claimed that they are still locked out of federal funding.

The Trump administration has been steadfast in its efforts to massively slash federal funding, and faces numerous lawsuits for its unprecedented actions.

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