Agents ordered to cease blocking financial resources from Trump's Executive Orders

The National Science Foundation and the Environmental Protection Agency (EPA) have received a reprieve, as a federal judge in Rhode Island issued a temporary restraining order against a controversial Office of Management and Budget (OMB) memorandum that aimed to freeze all federal grants, loans, and non-individualised assistance programs.

The OMB memorandum, which raised questions about the President's authority to pause wide swaths of congressionally appropriated funding for policy reasons, has caused significant uncertainty among agency staff and federal grantees. Last week, many spent their time seeking clarification and bracing for federal funding spigots to be shut off.

Judge John McConnell's order comes at a time when the NSF is reviewing its award portfolio to identify those out of alignment with Trump's orders. Sethuraman Panchanathan, the director of the NSF, has directed employees not to take any action to delay or stop payment for active grants due to the President's orders. In response to the court's order, the NSF has resumed payments to grant awardees.

The EPA, too, has experienced funding freezes due to Trump's orders on spending related to the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and DEI and other issues. However, federal employees in relevant departments were informed on Monday that the reduction of federal fund revenues by President Trump in key areas is no longer valid, and no further action can be taken to prevent the disbursement of funds. Employees at the EPA have been told that specific guidance for the agency will be forthcoming.

The Trump administration has already rescinded the OMB memorandum, but the President's orders on freezing foreign aid, infrastructure, and climate spending remain in effect. The notice sent to federal employees states that they cannot pause, freeze, impede, block, cancel, or terminate any awards or obligations on the basis of the OMB memorandum or Trump's recently issued executive orders. The notice applies to all federal agencies, not just those named as defendants in the case.

Agencies are required to comply with the court's order "out of an abundance of caution," and can still use their own discretion to block funding using applicable statute or regulation. An email sent to Federal Emergency Management Agency staff also stated that the restraining order "prohibits certain actions," and additional guidance would be forthcoming regarding the Department of Homeland Security's "separate authority."

Impacted groups and states have quickly sued, and another federal judge in Washington is currently weighing whether to implement a restraining order of her own. The sweeping order to freeze all federal grants, loans, and assistance not provided directly to individuals has led to significant confusion inside agencies. One EPA employee expressed uncertainty about the implications of the order, stating, "Not sure what is happening... Panic all around."

As the litigation in the case continues, it remains to be seen how the President's orders on funding will be interpreted and enforced. For now, the temporary restraining order provides a much-needed reprieve for agencies and grantees affected by the funding freeze.

Agents ordered to cease blocking financial resources from Trump's Executive Orders