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US Judge extends pause to Trump's plan of freezing federal grants and loans

A U.S. Judge on Monday extended the pause on Trump's plan to freeze federal grants, loans and other financial aid, stating that it could have "run roughshod over" Congress's constitutional power over government spending.

U.S. district judge Loren AliKhan wrote in Washington that the funding freeze described in a memo last week from the White House Budget Office would be "potentially disastrous" for organizations who rely on federal funds to carry out their mission and provide services to public.

In her ruling, which was issued on the request of several advocacy organizations, the policy now faces two temporary restraining order. On Friday, a federal judge in Rhode Island issued an order similar to the one that was requested by Democratic Attorneys General from 22 states as well as the District of Columbia.

AliKhan ordered last week a brief administrative pause to prevent the Office of Management and Budget from moving forward with their policy, while she assessed whether or not to issue a longer temporary restraining.

In its memo, OMB said that the funding freeze was needed to ensure that funding complied President Donald Trump's Executive Orders on Immigration, Climate Change, Diversity and other issues.

OMB retracted its memo completely on Wednesday after first attempting to clarify the funding suspension. The Republican administration argued that the withdrawal would have ended the AliKhan lawsuit brought by a coalition of advocacy groups.

The judge, appointed by Trump's Democratic predecessor Joe Biden said that a temporary restraining was still needed because funding issues remained, and there was nothing to stop OMB from issuing the policy again.

She stated that "the president's wishes can't be an open check to OMB for it to do whatever it wants." She said that the OMB memo could have involved as much as $3.5 trillion in financial aid, which is "a staggering amount of money to be suspended practically overnight."

Judge said that the policy seemed arbitrary, and could have violated the U.S. Constitution's authority to control government spending.

AliKhan wrote: "It didn't indicate when the freeze would end, if at all." "And it tried to take the purse power away from the only government branch entitled to use it."

Her order will be in effect while she decides whether or not to issue a longer preliminary injunction. The U.S. Department of Justice declined to comment on the case.

Diane Yentel of the National Council of Nonprofits praised AliKhan's ruling. She and several other nonprofit groups had sued AliKhan last week to stop what they called a "reckless effort to halt funding."

A lawyer for advocacy groups said that some recipients of federal grant funding were still having difficulty accessing funding, despite the withdrawal of the memo and the Friday order by the Rhode Island Judge.

Kevin Friedl told AliKhan, an attorney for the advocacy group Democracy Forward (a liberal-leaning organization), at the hearing, "We know that the policy is still in place."

Daniel Schwei, an attorney with the Justice Department argued that Trump retained the right to determine funding priorities through executive orders, which were not challenged in court.

Schwei said to the judge that "the president is permitted to direct subordinate organizations and supervise their activity." Reporting by Andrew Goudsward, Washington; editing by Nia William, Alexi Garamfalvi, and Sonali Paul

(source: Reuters)