Lawsuits challenging Trump administration’s ‘illegal’ freeze on federal loans and grants are stacking up

• Nonprofits, health workers, and small business owners joined in suing the White House on Tuesday.
• Their lawsuit says the Trump administration’s new freeze on federal loans and grants is illegal.
• The lawsuit asks a DC judge to halt the freeze before it takes effect at 5 p.m.

A group of nonprofits, health workers, and small business owners have asked a federal judge in Washington, DC, to immediately halt the Trump administration’s freeze on trillions of dollars in federal loans and grants before it takes effect at 5 p.m. Tuesday.

The freeze order is “devoid of any legal basis” and would harm hundreds of thousands of grant recipients who depend on federal grants, said the lawsuit, which was filed hours before the freeze was scheduled to take effect.

The freeze “will have a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent,” said the lawsuit.

The lawsuit by the National Council of Nonprofits, the American Public Health Association, and other groups, came in response to the White House budget office’s new order pausing nearly all federal grants and loans.

The freeze will allow agencies time to review some $3 trillion in federal grants and loans for compliance with new Trump policies.

Trump’s freeze-order was first revealed by multiple publications late Monday. On Tuesday morning the New York Times and other publications shared the two-page internal memo enacting the freeze.

The memo, from Acting Office of Management and Budget Director Matthew J. Vaeth, orders federal agency heads to freeze payments “to the extent permissible under applicable law.”

The agencies must then complete “a comprehensive analysis” to determine whether their federal assistance programs comply with Trump’s executive orders, the memo states.

It sets a February 10 deadline for agencies to submit to the United States Office of Management and Budget “detailed information on any programs, projects or activities subject to this pause.” OMB will then review and provide guidance on that spending.

The memo states that federal assistance should not be used to fund “wokeness” and “the weaponization of government.”

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” the memo states.

“Although the Trump Administration is at liberty to “advanc[e] [its] priorities,” it must do so within the confines of the law,” the lawsuit says.

“It has not,” the lawsuit continues.

“The Memo fails to explain the source of OMB’s purported legal authority to gut every grant program in the federal government; it fails to consider the reliance interest of the many grant recipients, including those to whom money had already been promised; and it announces a policy of targeting grant recipients based in part on those recipients’ First Amendment rights and with no bearing on the recipients’ eligibility to receive federal funds.”

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