A federal judge has extended the injunction against the Trump administration’s attempt to freeze trillions in federal funding, marking a critical victory for nonprofits and small businesses. U.S. District Judge Loren AliKhan emphasized the administration’s freeze would cause “economically catastrophic” harm, potentially shuttering organizations reliant on grants and loans.
“The funding freeze would be fatal to their members,”AliKhan wrote, referencing testimony from Democracy Forward and other plaintiffs. The ruling follows weeks of legal battles after the White House abruptly halted payments to align with Trump’s policy agenda.
Key developments in the case include:
- A Rhode Island court blocking the freeze in a separate state-led lawsuit
- Reports of delayed funds even after the administration rescinded its initial memo
- DOJ claims that courts lack authority to intervene in spending decisions
Plaintiffs argue the freeze violates First Amendment rights by politically weaponizing federal aid. Justice Department attorney Daniel Schwei dismissed concerns as speculative, but advocates counter that the earlier restraining order “unfroze critical funds” within days.
With 23 states and multiple advocacy groups now challenging the policy, this ruling sets a precedent for limiting executive overreach in federal spending disputes. Analysts warn the case could escalate to the Supreme Court if the administration appeals.