Judge says Trump administration is not in full compliance with order on spending

A federal judge in Rhode Island has found that the Trump administration has continued to freeze some federal funds, despite a temporary restraining order issued late last month blocking the administration's efforts to pause payments for grants and other federal programs.

In a five-page order issued Monday, U.S. District Judge John McConnell Jr. wrote that the administration, in several instances, has continued "to improperly freeze federal funds and refused to resume disbursement of appropriated federal funds."

Monday's ruling came in response to a lawsuit brought by attorneys general in 22 states and the District of Columbia. In his decision, McConnell ordered the administration to "immediately restore frozen funding" and "immediately end any federal funding pause" that affects the challengers. 

The Trump administration argued in a court filing leading up to the decision that it had acted "in good faith to interpret the scope of the Court's [temporary restraining order] and expeditiously resume any funding that is subject to it."

The order is one of two lawsuits filed against the administration in response to the attempted funding pause, originally detailed in a memo by the Office of Management and Budget in late January. The memo was rescinded days after it was released, but the White House has said a review of federal funding is still necessary to make sure that spending aligns with the president's agenda.

In his order, McConnell said the freeze was "likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country."

The judge pointed to information from the plaintiffs in the case that some funding has continued to experience delays and remains inaccessible after the initial court order. In an exhibit accompanying the judge's order, the states listed affected funding from multiple agencies, including the Environmental Protection Agency, the Department of Energy and the Department of Health and Human Services.

The order also specifically directs the administration to restore any withheld funding that was appropriated through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act — both passed during the Biden administration.

In its filing Sunday, the Trump administration argued that the temporary restraining order did not "Unambiguously Extend" to that spending because it was paused under a separate OMB memo.

Among the attorneys general challenging the administration's spending freeze is New York's Letitia James, who on Monday celebrated the decision as a victory for "millions of Americans in need."

"The law is clear: the President does not have the power to cut whatever spending he wants," James wrote in a statement posted to social media. "I will continue to make sure this administration follows the law."

In addition to the order in Rhode Island, a federal judge in Washington, D.C., has also issued a temporary restraining order against the administration — blocking the memo from taking effect and barring the administration from carrying it out "under a different name."

Frustration over funding

Leading up to the ruling, grantees, contractors and activists have been complaining that funding Congress appropriated still wasn't available — even after federal judges ordered the Trump administration to halt its spending freeze.

"The executive branch has taken every effort to dodge, sidestep and otherwise avoid complying with what appear to be very clear-cut directives to reinstate grantees lawful access to their bank accounts," said Zealan Hoover, who directed the EPA's infrastructure programs during the Biden administration.

In many cases, the federal government doesn't provide grant funding in big, upfront payments. Instead, organizations withdraw funds to cover about a week's worth of spending, or they submit invoices to the government to get paid back for expenses they've already incurred. That being the case, interruptions in government funding can be devastating if organizations don't have cash reserves to fall back on.

Groups that were cut off from grant funding "couldn't pay payroll, they couldn't buy equipment, they couldn't pay their subcontractors to do work," said Michelle Roos, executive director of the Environmental Protection Network, which is made up of former staffers and political appointees at the EPA.

Alys Campaigne, climate initiative leader at the Southern Environmental Law Center, said the Trump administration's spending freeze has eroded trust in government.

"Businesses and contractors and researchers, cities and states, everyone relies on the good faith that the U.S. meets its contracted obligations," Campaigne said.

"As a business owner or an individual, if we just said to somebody, 'Hey, sorry, I told you I'm going to pay my credit card bill, but no, I'm not,' we get whacked with fees and fines, and there are serious consequences," Campaigne added. "And there need to be consequences here when our government is acting in defiance of the law."

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