The United States Department of Justice has intervened to reinstate federal funding that had been previously frozen by an Office of Management and Budget (OMB) directive. This decision is a response to concerns about compliance with a number of executive orders issued by the Trump administration. According to the Justice Department’s recent directive, federal agencies must refrain from using the OMB memo as a rationale for withholding funds on owed or rewarded sums. However, agencies maintain the discretion to pause grants or debt payments, provided such actions are not based on the memo but are within their discretionary authority as stipulated by law.
This development comes in the wake of a Delaware district court’s issuance of a temporary restraining order aimed at halting the OMB’s memorandum, which called for a comprehensive freeze on federal funding. The memo had sought to maintain a freeze until federal agencies conformed to recent executive orders targeting structural changes within these agencies. Among the more notable changes, these orders included the elimination of references to critical race theory and the ban on gender theory references, in addition to a federal hiring freeze and efforts to weaken employee protections for those working within federal agencies.
The Justice Department’s order aligns with a class action suit initiated by a coalition of states and non-profits. This lawsuit contends that the OMB’s memorandum contravened procedural laws and infringed upon the constitutional division of powers between the legislative and executive branches. Specifically, the plaintiffs argue that the memo’s actions were “arbitrary, capricious, an abuse of discretion,” and thus not in accordance with law, in violation of § 706 of the Administrative Procedure Act. Additionally, they claim that the memorandum violated the Constitution, which delegates legislative powers and spending authority to Congress as outlined in Amendment 1.1 and Amendment 1.8.
Though OMB’s directive has now been nullified, the White House maintains that President Trump’s executive orders on federal funding remain effective. The White House press secretary, Karoline Leavitt, emphasized on X (formerly Twitter) that the court’s decision would not impact the implementation of these orders, which are set to be enforced rigorously. For further information, you can access the full report on the Justice Department’s orders.