Trump administration cannot implement ‘sweeping’ funding freeze, US court rules

The 'unprecedented' freeze on trillions of dollars in financial assistance was instituted in early 2025. Read more at straitstimes.com.

BOSTON – A federal appeals court on March 16 largely upheld a ruling that blocked a “sweeping and unprecedented” freeze on trillions of dollars in government financial assistance that US President Donald Trump’s administration instituted early in 2025.

A three-judge panel of the Boston-based 1st US Circuit Court of Appeals sided with Democratic attorneys-general from 22 states and the District of Columbia in finding that the White House’s budget office had directed federal agencies to implement a categorical freeze on funding that was likely improper.

Chief US Circuit Judge David Barron said the Office of Management and Budget (OMB) “directed the agency defendants to freeze such funds without considering an obvious aspect of the problem – namely, the reliance interests of the recipients of the obligated federal funds that were to be frozen”.

The judge, who like the other panel members was appointed by a Democratic president, pointed to a lower-court judge’s conclusion that the agencies failed in carrying out OMB’s directive to assess whether such payments were legally required or appropriate on a case-by-case basis.

While the appeals court largely upheld Rhode Island-based US District Judge John McConnell’s March 2025 injunction blocking the policy, it overturned part of it to the extent it required agencies to make payments to the states that sued.

It did so citing a ruling in 2025 by the US Supreme Court in a different Trump-era case that indicated lawsuits seeking to recover money owed by the government under contracts and grants must be pursued in a different, specialist court.