(Updated)
A federal judge paused the “pause” that the Trump Administration issued in an attempt to block all federal grants and loans from being paid. Agencies had been ordered to submit to the White House Office of Management and Budget “detailed information on any programs, projects or activities subject to this pause” by February 10.
A coalition of nonprofits filed a Motion for Temporary Restraining Order in the U.S. District Court for the District of Columbia. It was granted, blocking the federal agencies from pausing all federal grants and loans. Plaintiffs, represented in the legal challenge by Democracy Forward, include the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE.
U.S. District Judge Loren AliKhan issued the restraining order blocking the freeze that was to take effect at 5 p.m. The order is in effect until February 3.
In a separate filing, attorneys general in 22 states and the District of Columbia went into federal court in Rhode Island also seeking an injunction against the freeze. That was pending at the time this was posted. The states argued the administration violated the Administrative Procedure Act and the constitutional separation of powers. At some points during Tuesday Medicaid portals were down in all 50 states.
The memo outlining the freeze was issued Monday by White House Office of Management and Budget Acting Director Matthew Vaeth. It ordered a “pause” to grants, loans and “other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
“This reckless action by the administration would be catastrophic for nonprofit organizations and the people and communities they serve,” said Diane Yentel, chief executive of the National Council of Nonprofits. “From pausing research on cures for childhood cancer to halting housing and food assistance, shuttering domestic violence and homeless shelters, and closing suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives. This order must be halted immediately before such avoidable harm is done,” she said via a statement.
“Improving the public’s health by supporting our state, tribal, local and territorial health departments and other national and community-based health organizations is essential and federal agency grants play an extremely critical role in achieving these efforts in every community,” said Georges C. Benjamin, MD, executive director of the American Public Health Association. “By pausing these vital funds, which were approved by Congress, this decision threatens to stall essential public health and prevention programs and research. Halting these funds stymies progress and is a matter of life and death.”
Read the full memo below.
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One nonprofit official who tracks federal activity but spoke on background said nonprofit officials are unsure what will happen next. “No one knows for sure yet because all there is, so far, is a leaked memo, but it seems like it” that funding will stop. The person said that it “will get sorted out in court. There are differing opinions, but some people we’ve seen quoted overnight indicate that he can’t stop the funding, but probably can do a pause.”
U.S. nonprofits spent an estimated $27.2 billion on research and experimental development (R&D) performed within their organizations in FY 2021, according to data from the National Center for Science and Engineering Statistics. Federal government provided $11.6 billion in funding to nonprofit R&D, the last numbers available.
In fiscal year 2023, the federal government spent $166.4 billion on food and nutrition assistance programs. This was a 13% decrease from the previous year when adjusted for inflation, according to the U.S. Department of Agriculture.
Billions more are granted to after school programs and other programs.
“For small businesses across America, the administration’s decision to freeze all federal funding could be catastrophic. Federal funding serves as the backbone of many community programs and initiatives that small businesses rely on to thrive,” said Richard Trent, Main Street Alliance executive director. “Without it, essential services like infrastructure development, workforce training, and childcare programs—services that allow small businesses to operate and grow—will crumble and the ripple effects will hit Main Street hard.”
“Blocking federal grants and loans would devastate the lives of older Americans — including LGBTQ+ elders who already face unique challenges,” said Michael Adams, CEO at SAGE. “These individuals are more vulnerable to health issues, disabilities, and social isolation and often struggle to access the care and services they need. This reckless decision puts entire communities at risk. We must work together now to protect our older neighbors, friends, and loved ones before it’s too late.”
Said Skye Perryman, president and CEO of Democracy Forward: “The actions taken yesterday are a callous disregard for the rule of law and a drastic abuse of power that will harm millions of Americans across the country. … We are honored to represent diverse sectors in urging the court to block this lawless attempt to harm everyday Americans in service of a political goal. It’s past time to put people over politics and we will continue to be in court on behalf of the American people.”
This is breaking news. The NonProfit Times will be updating throughout the day.
