US judge temporarily blocks Trump's freeze on federal grants and loans

A U.S. judge has temporarily blocked President Donald Trump's directive to freeze hundreds of billions of dollars in federal grants and loans, just minutes before the order was set to go into effect on Tuesday.

Judge Loren AliKhan issued the ruling to pause the freeze until next Monday at 5:00 PM EST (10:00 PM GMT) in response to a lawsuit filed earlier that day by a group of organizations representing grant recipients.

The lawsuit argues that the White House's temporary halt of already approved funding is a violation of the law.

In the hours leading up to the planned freeze, there was significant uncertainty about which agencies and programs would be affected.

The acting head of the White House Budget Office recently instructed federal agencies to "temporarily pause all activities related to obligations or disbursements of federal financial assistance." The directive aimed to give the new administration time to evaluate which grants and loans align with its agenda.

White House Press Secretary Karoline Leavitt explained that former President Trump's proposal to halt billions of dollars in government funding was meant to be "good stewards of tax dollars." She stated that the funding pause would allow for cuts in spending on "woke" gender issues and diversity programs.

However, the move sparked confusion and anger, particularly from those reliant on federal grants and loans, such as non-profits and research organizations, who faced the prospect of sudden funding losses.

On Tuesday, Judge AliKhan issued a brief stay to "preserve the status quo" until a full oral argument, scheduled for Monday. This White House directive could have impacted billions of dollars allocated for federal programs, including disaster relief and cancer research.

Diane Yentel, president of the National Council of Nonprofits, celebrated the ruling in a post on X, stating that the US District Court blocked the Office of Management and Budget's plan to suspend federal funding. In the lawsuit, her organization argued that Trump's order would essentially eliminate most federal grant programs.

The argument against Trump's executive order is that it is "devoid of any legal basis or reasonable justification" and could have widespread consequences across the United States and beyond.

This action is separate from a lawsuit filed by a coalition of Democratic states on Tuesday, which seeks to block the order, labeling it unconstitutional.

Stephen Miller, the White House deputy chief of staff, defended the directive before the judge's ruling, claiming it would allow the government to achieve "credit control." He also reassured reporters that it would not impact any federal programs Americans rely on, such as the "Meals on Wheels" food delivery service.

On Tuesday, several states reported difficulties accessing Medicaid funds, a government health insurance program for low-income individuals. The White House later clarified that the program would not be affected and the issue would be addressed promptly.

The administration also emphasized that Social Security benefits, as well as any program offering "direct benefits to individuals" like SNAP (food stamps), would not be impacted.

In a letter to the White House, top Democrats expressed "extreme alarm" over the plan to pause funding. Washington Senator Patty Murray and Connecticut Congresswoman Rosa DeLauro wrote that the scope of the order was "breathtaking, unprecedented, and will have devastating consequences across the country."

Democratic Senate minority leader Chuck Schumer warned that the move could result in missed payrolls and rent payments, creating "chaos."