Federal Aid Freeze Persists Despite Court Order, Harming Non-Profits and Vulnerable Populations

Federal Aid Freeze Still Impacts Nonprofits Despite Court Order

Despite a court order blocking the Trump administration's freeze on federal aid and the Office of Management and Budget's (OMB) subsequent rescission of its memo announcing the policy, some forms of federal aid spending remain frozen. This has caused significant hardship for numerous non-profit organizations that rely on this funding.

U.S. District Judge Loren AliKhan, who issued a temporary restraining order blocking the funding freeze, dismissed arguments from the Justice Department that the lawsuit should be dismissed due to the rescission of the OMB memo. She cited evidence that the freeze itself was not lifted, despite the memo's rescission.

"We have individuals who are still having issues accessing funding platforms," AliKhan said during a hearing. "That indicates to me the memo is still doing some work."

In her order, AliKhan wrote, "Given the evidence that the memo announcing the freeze was rescinded but the freeze itself was not, it appears that OMB sought to overcome a judicially imposed obstacle without actually ceasing the challenged conduct. The court can think of few things more disingenuous.”

Several non-profit organizations have submitted declarations to the court detailing their inability to access federal funds. These declarations highlight the real-world consequences of the freeze, including layoffs, reduced services, and the inability to provide essential care to vulnerable populations.

One declaration from the board president of a West Virginia non-profit that helps people with disabilities remain in their homes states that they have been waiting for federal funds since January 29th but have not yet received them. This delay has forced them to lay off employees and drastically reduce services, putting their clients in a dire situation.

Another declaration from the CEO of a rural health center emphasizes the impact on patient care. "I don't care about the political fight surrounding the OMB Memo," the CEO writes. "I just want to help my Health Center's staff care for our patients. But unless our federal funding is restored, we will not be able to provide that care."

While AliKhan's temporary restraining order does not change the current situation, it echoes a similar order issued by a federal judge in Rhode Island in a separate case. These rulings underscore the ongoing legal challenges to the Trump administration's attempt to freeze federal aid and the significant impact it has on non-profit organizations and the communities they serve.