Trump funding freeze challenged in lawsuit by nonprofit groups

Nonprofit groups and a small business organization filed a lawsuit on Tuesday asking a judge to temporarily block a funding freeze ordered by the Trump administration of federal grants and loans.

The lawsuit says the freeze by the Office of Management and Budget set to take effect at 5 p.m. ET on Tuesday is illegal.

The suit in U.S. District Court in Washington, D.C., blasts the OMB’s action, which became known Monday night through a two-page memo.

That memo, from acting OMB Director Matthew Vaeth, details a “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs,” according to its subject line.

The memo requires federal agencies to identify and review all federal financial assistance programs and supporting activities consistent with President Donald Trump‘s policies.

It also says those agencies “must temporarily pause all activities related to obligation and disbursement” of all federal financial assistance that may be implicated by Trump’s executive orders, including foreign aid, assistance to nongovernmental organizations, “woke gender ideology, and the green new deal.”

Senate Minority Leader Chuck Schumer, D-New York, at a news conference Tuesday morning called the memo “a dagger at the heart of the average American family — in red states, in blue states, in cities, in suburbs, in rural areas.”

“It is just outrageous,” Schumer added.

The lawsuit filed Tuesday says, “This Memo — made public only through journalists’ reporting, with barely twenty four hours’ notice, devoid of any legal basis or the barest rationale — will have a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent — and, indeed, improve the day-to-day lives of the many people they work so hard to serve.”

“Although the Trump Administration is at liberty to ‘advanc[e] [its] priorities,’ it must do so within the confines of the law. It has not,” the suit says.

“The Memo fails to explain the source of OMB’s purported legal authority to gut every grant program in the federal government; it fails to consider the reliance interest of the many grant recipients, including those to whom money had already been promised; and it announces a policy of targeting grant recipients based in part on those recipients’ First Amendment rights and with no bearing on the recipients’ eligibility to receive federal funds.”

The suit was filed by the National Council of Nonprofits, the American Public Health Association, the Main Street Alliance and the New York-based group SAGE.

The New York state attorney general’s office is planning its own lawsuit challenging the OMB’s freeze.

New York AG Letitia James, in a tweet, wrote, “My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding.”

“We won’t sit idly by while this administration harms our families,” James wrote.