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In several court cases, federal judges have temporarily blocked the Trump administration from broadly cutting or freezing federal spending. President Donald Trump claimed that the judges “want to try and stop us from looking for corruption” and “hold us back from finding all of this fraud.” But the court orders don’t stop investigations into corruption or fraud.
Rather, they pertain to sweeping actions by the executive branch to curtail spending that Congress had already appropriated, setting up a constitutional showdown that’s destined for the Supreme Court. The orders halt the spending freezes while the courts consider the merits of the lawsuits.
In one of the cases challenging the administration’s freeze of all federal financial assistance, District Court Judge John J. McConnell Jr. addressed the government’s argument that “they are just trying to root out fraud,” writing: “But the freezes in effect now were a result of the broad categorical order, not a specific finding of possible fraud.”
The case concerns the administration instructing agencies to freeze disbursements of federal grants and loans and then conduct a review of such disbursements, a halt to spending that could affect upwards of $3 trillion. “That is a breathtakingly large sum of money to suspend practically overnight,” District Court Judge Loren L. AliKhan wrote in an order in a second legal challenge to the freeze. “Rather than taking a measured approach to identify purportedly wasteful spending, Defendants cut the fuel supply to a vast, complicated, nationwide machine—seemingly without any consideration for the consequences of that decision.”
In another case, involving the administration’s freeze of foreign development assistance, District Court Judge Amir H. Ali wrote that the government had argued it suspended all foreign aid so the programs could be reviewed “for their efficiency and consistency with priorities.” But the government hadn’t “offered any explanation for why a blanket suspension of all congressionally appropriated foreign aid, which set off a shockwave and upended reliance interests for thousands of agreements with businesses, nonprofits, and organizations around the country, was a rational precursor to reviewing programs,” Ali wrote.
“In the abstract, it’s absolutely true that the executive branch can look for corruption, fraud, or abuse,” Kermit Roosevelt, a constitutional law professor at the University of Pennsylvania Carey Law School, told us in an email. “If there are agencies or programs that are spending money in ways not authorized by Congress, the executive branch can stop that. But the executive branch cannot unilaterally freeze authorized spending because the executive believes it is wasteful.”
“Fraud is a crime,” Richard J. Pierce Jr., a George Washington University law professor who specializes in administrative law, told us in a phone interview. “Every agency has internal means for trying to detect when a fraud is taking place. And when they detect it, they call in the FBI, and the FBI conducts a criminal investigation.”
Trump made his claims when talking to reporters in the Oval Office on Feb. 11 about spending cuts proposed by the new Department of Government Efficiency, which is being overseen by Elon Musk. Trump repeatedly returned to the idea that judges didn’t want to allow the executive branch to uncover fraud or corruption. “And it seems hard to believe that judges want to try and stop us from looking for corruption, especially when we found hundreds of millions of dollars’ worth, much more than that, in just a short period of time,” Trump said. “We want to weed out the corruption, and it seems hard to believe that a judge could say we don’t want you to do that. So, maybe we have to look at the judges because that’s a very serious — I think it’s a very serious violation.”
Later, Trump said: “Any court that would say that the president or his representatives like secretary of the Treasury, secretary of State, whatever, doesn’t have the right to go over their books and make sure everything’s honest. I mean, how can you have a country?”
And when asked whether he agreed with Republican Sen. Rand Paul’s comments that ultimately Congress would need to vote on DOGE’s proposed spending cuts, Trump said, “I really don’t know. I know this. We’re finding tremendous fraud and tremendous abuse. If I need a vote of Congress to find fraud and abuse it would be — it’s fine with me. … And how could a judge want to hold us back from finding all of this fraud and finding all of this incompetence? Why would that happen? Why would even Congress want to do that?”
Whether the president can refuse to spend money that Congress had appropriated is at the heart of these court cases — not whether the executive branch can root out fraud.
“There is some debate about the President’s power to decline to spend money—after Nixon asserted that power, Congress responded by forbidding such impoundments,” Roosevelt told us, referring to the Impoundment Control Act of 1974. The law reinforced that Congress controlled spending — the so-called “power of the purse” under the Constitution — and said that Congress would need to approve requests from the president in order for a president to rescind funds, as the Congressional Research Service explained in a 2010 report.
“There are procedures for accomplishing the things they want to accomplish, and they’re ignoring all those procedures,” Pierce told us.
Roosevelt said there is “a minority view in the legal world” that the Impoundment Control Act is unconstitutional. “But generally, the rules that we’ve been working under for the past two hundred years are that Congress can by law direct the executive branch to spend money as Congress sees fit, and the executive branch must faithfully execute those laws. The court rulings that I’m aware of have ordered the President to spend the money that Congress has appropriated as Congress has directed, which is entirely proper under our current understanding of the Constitution.”
“We will be getting, eventually, a Supreme Court opinion that resolves” whether the executive branch can stop funding that Congress authorized, Pierce said. “The problem is, it takes years to get a decision on the merits.” He said it would take two to three years to get a Supreme Court ruling.
Pierce explained that the Trump administration alleges the Impoundment Control Act violates Article II of the Constitution, which says “executive Power shall be vested in a President of the United States.”
“I think they’re going to lose on that argument, but I can’t be sure,” Pierce said. “It’s going to be a serious constitutional case. And the problem is, they’re trying to move very, very rapidly, and the judicial system moves very slowly.”
The courts can quickly issue temporary restraining orders or injunctions to halt some of the administration’s actions as the cases move forward, if plaintiffs show they would be irreparably harmed by the actions. We’ll take a closer look at some of the orders, which — contrary to Trump’s claims — don’t show the courts blocking efforts to stop specific instances of “fraud” or “corruption.”
One federal judge also said the administration had failed to abide by an order to unfreeze spending.
The White House didn’t respond to our inquiry about Trump’s claims. In a Feb. 12 press briefing, White House Press Secretary Karoline Leavitt was asked about the court orders. “We believe that the injunctions that have been issued by these judges have no basis in the law and have no grounds and we will, again, as the president said, very clearly yesterday, comply with these orders,” she said. “But it is the administration’s position that we will ultimately be vindicated and the president’s executive actions that he took were completely within the law.”
Court Orders on Federal Funding Freeze
Two District Court judges have issued temporary restraining orders blocking the administration’s attempt to pause all federal financial assistance, including grants and loans.
The cases concern a two-page memo issued by the executive branch’s Office of Management and Budget on Jan. 27, requiring federal agencies to “complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders,” noting that such federal assistance totaled more than $3 trillion in fiscal year 2024. And while that review was happening, the memo said, “to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
The next day, OMB rescinded the memo, but Leavitt said in a Jan. 29 post on X, “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo.”
In the District of Rhode Island, 22 states with Democratic governors, plus the District of Columbia, sued the Trump administration, arguing that the freeze was unconstitutional and against federal laws. Judge McConnell, who was nominated to the bench by former President Barack Obama, said in his Jan. 31 ruling that the executive branch hadn’t followed the law regarding congressional appropriations.
He quoted Supreme Court Justice Brett Kavanaugh, a Trump nominee, when Kavanaugh was on the D.C. circuit court. “[A] President sometimes has policy reasons … for wanting to spend less than the full amount appropriated by Congress for a particular project or program,” Kavanaugh had written in a 2013 case. “But in those circumstances, even the President does not have unilateral authority to refuse to spend the funds. Instead, the President must propose the rescission of funds, and Congress then may decide whether to approve a rescission bill.’”
The judge issued a temporary restraining order, saying that the executive branch “shall not pause, freeze, impede, block, cancel, or terminate Defendants’ compliance with awards and obligations to provide federal financial assistance to the States, and Defendants shall not impede the States’ access to such awards and obligations, except on the basis of the applicable authorizing statutes, regulations, and terms.” McConnell went on to say that the defendants can still review federal grants and programs as long as that review doesn’t block funding.
The states later filed a motion saying that some federal funding was still being blocked, despite the order. That’s when McConnell commented on the executive branch’s claim of finding fraud.
“The States have presented evidence in this motion that the Defendants in some cases have continued to improperly freeze federal funds and refused to resume disbursement of appropriated federal funds. The Defendants now plea that they are just trying to root out fraud,” he wrote in the Feb. 10 order. “But the freezes in effect now were a result of the broad categorical order, not a specific finding of possible fraud. The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country.”
The second case regarding the funding freeze was filed in the District Court for the District of Columbia by nonprofit groups who said OMB had violated the Administrative Procedure Act, which concerns procedures that federal agencies follow and how their actions can be challenged in court.
“Rather than give the agencies full control over what to freeze and what to leave undisturbed, Defendants mandated that all ‘Federal agencies must temporarily pause all activities related to [the] obligation or disbursement of all Federal financial assistance,'” District Judge AliKhan, an appointee of former President Joe Biden, wrote in her Feb. 3 order.
“Defendants, meanwhile, insist that ‘there is nothing irrational about a temporary pause in funding’ when it is done ‘to ensure compliance with the President’s priorities,'” AliKhan wrote. “But furthering the President’s wishes cannot be a blank check for OMB to do as it pleases. The APA requires a rational connection between the facts, the agency’s rationale, and the ultimate decision. Defendants have offered no rational explanation for why they needed to freeze all federal financial assistance— with less than twenty-four-hours’ notice—to ‘safeguard valuable taxpayer resources,'” a quote from OMB’s memo. “If Defendants intend to conduct an exhaustive review of what programs should or should not be funded, such a review could be conducted without depriving millions of Americans access to vital resources.”
The TRO she issued barred OMB from implementing its memo or the directives in it “with respect to
the disbursement of Federal funds under all open awards.”
USAID-Related Cases
Two other cases concern the executive branch’s attempt to abolish or restructure the U.S. Agency for International Development.
In the District Court for the District of Columbia, two unions representing USAID workers got a TRO blocking the executive branch from putting 2,200 USAID employees on administrative leave. Judge Carl J. Nichols issued the order on Feb. 7, the same day the leave was set to begin. Another 500 employees had already been put on leave.
“[P]laintiffs have asserted at least a colorable argument that placing almost 3,000 USAID employees on administrative leave would violate the Further Consolidated Appropriations Act of 2024, which requires the State Department and USAID to consult with Congress before, among other things, ‘reorganiz[ing]’ or ‘redesign[ing]’ USAID, including by ‘downsiz[ing]’ it,” Nichols, a Trump appointee, wrote.
The executive branch’s lawyers tried to argue that the move had something to do with “corruption and fraud,” without providing any evidence, but Nichols didn’t buy it.
“When the Court asked the government at the TRO hearing what harm would befall the government if it could not immediately place on administrative leave the more than 2000 employees in question, it had no response— beyond asserting without any record support that USAID writ large was possibly engaging in ‘corruption and fraud,'” Nichols wrote. “The Court thus has no difficulty concluding that the balance of the hardships favors the plaintiffs. A TRO as to this issue is warranted.”
In a lawsuit filed in the same District Court by the AIDS Vaccine Advocacy Coalition and the Global Health Council, Judge Ali said in a Feb. 13 order that a funding freeze for USAID projects should be lifted.
The plaintiffs challenged a Trump executive order that implemented a 90-day funding freeze on foreign development assistance while the spending was reviewed “for programmatic efficiency and consistency with United States foreign policy,” the EO said. The plaintiffs argued the action violated the Administrative Procedure Act.
As we noted, Ali, a Biden appointee, wrote that the defendants hadn’t given an explanation for why “a blanket suspension of all congressionally appropriated foreign aid” was needed before reviewing the programs.
There was nothing wrong with a review of the foreign aid, he said. “To be sure, there is nothing arbitrary and capricious about executive agencies conducting a review of programs. But there has been no explanation offered in the record … as to why reviewing programs—many longstanding and taking place pursuant to contractual terms— required an immediate and wholesale suspension of appropriated foreign aid,” he said.
The judge issued a TRO barring the government from suspending or pausing foreign aid disbursements for contracts and agreements that existed before Trump took office.
In a court filing on Feb. 18, the administration’s lawyers said the Department of State and USAID were reviewing thousands of contracts and grants that had been impacted by the administration’s actions and hadn’t found any that were affected by the TRO. “USAID has not yet identified a termination, suspension, or stopwork order issued on a USAID contract, grant, or cooperative agreement that was not allowed by the terms of those instruments or terms implicitly incorporated into those instruments,” the filing said.
In another filing, the State Department said it had terminated more than 700 grants and suspended more than 6,800. It did not say how much those grants totaled.
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