WASHINGTON — A federal appeals court declined to immediately stop a judge’s order that required the Trump administration to release billions of dollars in federal grants and loans that were previously frozen despite a court ruling against a halt on federal funding.
The 1st U.S. Circuit Court of Appeals based in Boston rejected the urgent appeal but indicated that it expected the lower court judge to promptly clarify the order and would continue to review the matter.
The Justice Department argued the sweeping lower court order to keep all federal grants and loans flowing was “intolerable judicial overreach.”
President Donald Trump speaks with reporters in the Oval Office at the White House, Tuesday, Feb. 11, 2025, in Washington.
Photo/Alex Brandon
The decision stemmed from a ruling by U.S. District Court Judge John McConnell in Rhode Island, who was the first to determine that the administration had violated a court directive.
McConnell is presiding over a lawsuit from nearly two dozen Democratic states filed after the administration issued a boundary-pushing memo purporting to halt all federals grants and loans, worth trillions of dollars. The plan sparked chaos around the country.
The administration has since rescinded that memo, but McConnell found Monday that not all federal grants and loans had been restored.
Money for things like early childhood education, pollution reduction and HIV prevention research has remained tied up even after his Jan. 31 order halting the spending freeze plan, the states said.
McConnell, who was appointed by former President Barack Obama, ordered the Trump administration to “immediately take every step necessary” to unfreeze federal grants and loans.
He also said his order blocked the administration from cutting billions of dollars in grant funding from the National Institutes of Health, a move announced last week.
The Justice Department said McConnell’s order prevents the executive branch from exercising its lawful authority, including over discretionary spending or fraud.
“A single district court judge has attempted to wrest from the President the power to ‘take care that the laws be faithfully executed.’ This state of affairs cannot be allowed to persist for one more day,” government attorneys wrote in their appeal.
The states, meanwhile, argued that the president can’t block money that Congress has approved, and the still-frozen grants and loans are causing serious problems for their residents. They urged the appeals court to keep allowing the case to play out in front of McConnell.
The court battle is unfolding as a string of court losses is increasingly frustrating top administration officials by slowing President Donald Trump’s wide-ranging agenda .
Judges have also blocked, at least temporarily, Trump’s push to end birthright citizenship for anyone born in the U.S., access to Treasury Department records by billionaire Elon Musk’s Department of Government Efficiency and a mass deferred resignation plan for federal workers.
The Republican administration previously said the sweeping funding pause would bring federal spending in line with the president’s priorities, including increasing fossil fuel production, removing protections for transgender people and ending diversity, equity and inclusion efforts.
A different federal judge in Washington has also issued a temporary restraining order against the funding freeze plan and since expressed concern that some nonprofit groups weren’t getting their funding.
