A federal appeals court has upheld a lower court decision preventing the Trump administration from freezing state funding.
• The U. S. Court of Appeals for the First Circuit ruled on March 16 that the White House Office of Management and Budget (OMB) acted “arbitrarily and capriciously” by pausing funding.
• Judge David Barron noted that the OMB did not consider the impact on states relying on these federal funds.
• An initial directive from the OMB ordered agencies to assess programs based on Trump’s policies as of January 27, 2025.
• U. S. District Judge John McConnell had earlier blocked the freeze, stating the executive branch couldn't unilaterally suspend federal funds.
• Although the OMB withdrew its directive, legal challenges continue due to evidence of actions taken to freeze funds after the withdrawal.
• The court upheld McConnell’s order for the government to maintain certain payments, but some grant payments were left out of the injunction.
The ruling reinforces the necessity for the government to consider recipients' reliance on federal funds, rejecting the Trump administration's freeze as unjustified.
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