The White House Office of Management and Budget (OMB) rescinded a memo to freeze all federal grants and loans hours before a Wednesday hearing for a lawsuit filed by Democratic attorneys general in 22 states and the District of Columbia.
At the hearing, a lawyer for President Donald Trump’s Department of Justice (DOJ) argued that the lawsuit should be moot, since the memo was rescinded. But the judge didn’t buy it, given Press Secretary Karoline Leavitt’s statement minutes before the hearing saying the policy of freezing funds had not been rescinded. Instead, he ordered the plaintiffs to file a proposed order for a temporary restraining order to properly ask to halt any freeze on federal funds, rather than just the now-rescinded memo.
The memo had already been temporarily blocked Tuesday by a judge in a separate case brought by Democracy Forward on behalf of several nonprofits, public health organizations and small businesses. They argued the OMB memo violated the First Amendment and Administrative Procedure Act.
In the two-page OMB memo, the White House instructed all federal agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities.” The memo, which affects trillions of dollars that have already been allocated by Congress, specifically calls out programs for foreign aid, NGOs, DEI and the environment.
News of the memo immediately sent shock waves of anger and confusion throughout Congress. “They say this is only temporary, but no one should believe that,” Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement, according to the Washington Post. “Donald Trump must direct his Administration to reverse course immediately and the taxpayers’ money should be distributed to the people. Congress approved these investments and they are not optional; they are the law.” Read more about the legal challenges here.
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