‘A problem of your own making’: Judge prepares to block Trump’s funding freeze over ‘sideshow’ memo that caused chaos and confusion

President Donald Trump holds up a signed executive order in the Oval Office of the White House, Monday, Feb. 3, 2025, in Washington (AP Photo/Evan Vucci).

President Donald Trump holds up a signed executive order in the Oval Office of the White House, Monday, Feb. 3, 2025, in Washington (AP Photo/Evan Vucci).

A federal judge in Washington, D.C., on Monday said she was “inclined” to issue a temporary restraining order blocking the Trump administration from implementing a policy that would freeze funding on distributions to federal aid programs, effectively extending the administrative stay she put in effect last week.

U.S. District Judge Loren AliKhan appeared to reject the Justice Department’s contention that the plaintiffs’ case was moot after a controversial memo issued by the White House Office of Management and Budget (OMB) last week ordering the freeze was rescinded, reasoning that the directives contained therein were still being implemented across federal agencies.

The OMB memo, which was sent out Jan. 28, stated the following (bold in original):

[T]o the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, 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.

The measure caused mass confusion throughout entities dependent on the federal government for funding. Multiple lawsuits were filed and AliKhan on Jan. 29 stopped the measure from going into effect and ordered an expedited hearing on the matter.

AliKhan’s order came in response to a lawsuit filed by the National Council of Nonprofits (NCN), the largest network of nonprofit organizations in North America.

The administration responded to the myriad legal actions by issuing a follow-up memorandum rescinding the prior one.

“OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,” the second memo stated.

During Monday’s hearing, the DOJ argued that the plaintiff’s case was moot, as OMB had rescinded the memo at the heart of the lawsuit, explaining that guidance had been issued directing federal agencies not to rely on the memo. The attorney, Daniel Schwhy, also claimed that any funding freezes still in place were due to individual federal agencies “exercising their own discretion” to comply with a flurry of executive orders signed by President Donald Trump during his first week in office.

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