US Appeals Court Blocks Trump Administration’s Sweeping Attempt to Freeze Trillions in Federal Assistance

A federal appeals court on Monday largely upheld a ruling blocking a “sweeping and unprecedented” freeze on trillions of dollars in government financial assistance that the administration of President Donald Trump introduced early last year.

A three-judge panel of the Boston-based United States Court of Appeals for the First Circuit sided with Democratic officials from 23 states and the District of Columbia, finding that the White House budget office had directed federal agencies to impose a categorical freeze on funding that was likely improper.

Chief Judge David Barron said the Office of Management and Budget had “directed the agency defendants to freeze such funds without considering an obvious aspect of the problem — namely, the reliance interests of the recipients of the obligated federal funds that were to be frozen”.

Barron noted a lower-court judge’s conclusion that the agencies failed, while carrying out the OMB’s directive, to assess whether the payments were legally required or appropriate on a case-by-case basis.

The court therefore said it would largely uphold John McConnell Jr.’s March 2025 injunction blocking the policy, as well as a later order directing the Federal Emergency Management Agency to comply with the ruling after it failed to do so.

Rob Bonta, a Democrat, said in a statement that the ruling made clear the administration’s unilateral funding freeze “was deeply harmful, reckless and wholly unreasoned”.

While the court largely sided with him and other Democratic attorneys general, it overturned part of McConnell’s injunction requiring agencies to make payments to the states. The judges said a ruling by the Supreme Court of the United States requires claims for money to be pursued in a different court.

The White House did not respond to a request for comment.

The states filed suit after the Office of Management and Budget in January 2025 — shortly after Trump returned to the White House — issued a memorandum directing federal agencies to temporarily pause spending on federal financial assistance programmes.

The memo said the freeze was necessary while the administration reviewed grants and loans to ensure they were aligned with Trump’s executive orders, including measures ending diversity, equity and inclusion programmes and pausing spending on projects aimed at combating climate change.

The OMB later withdrew the memorandum after it became the subject of litigation. However, the states argued that the withdrawal of the memo did not mean the policy itself had ended.

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