Appeals Court Blocks Trump Administration's Funding Freeze

A federal appeals court largely upheld a ruling that blocked a 'sweeping and unprecedented' freeze on trillions of dollars in government financial assistance initiated by Donald Trump's administration. The United States===United States Court of Appeals for the First Circuit sided with Democratic attorneys general from 22 states and the District of Columbia, finding that the United States===Office of Management and Budget improperly directed federal agencies to freeze funds without considering the reliance interests of recipients. Chief U.S. Circuit Judge David Barron highlighted the agencies' failure to assess payments on a case-by-case basis. While largely upholding U.S. District Judge John McConnell's injunction, the appeals court overturned the part requiring agencies to make payments to the states that sued, citing a United States===Supreme Court of the United States ruling that such lawsuits must be pursued in a specialist court. The United States===Office of Management and Budget had issued a memo in January 2025 to pause spending on federal financial assistance programs, which was later withdrawn, but the states argued the policy itself persisted.