Federal court halts Trump's financial freeze; government's chief auditor examines legality of the act
The General Accounting Office (GAO) has concluded that President Trump's order to pause funding for the border wall was unlawful, as it bypassed Congress's appropriations authority. This decision comes amidst a series of events that have caused widespread panic and confusion across government agencies.
The spending pause, scheduled to go into effect at 5 p.m. on Friday, was put on hold until at least Feb. 3. However, a federal judge has since blocked President Trump's freeze of many federal grants, loans, and assistance programs, just minutes before the freeze was set to take effect.
The Impoundment Control Act prohibits the executive branch from withholding congressionally appropriated funds for policy reasons. In 2020, the GAO found that the Trump administration violated this act by withholding aid to Ukraine.
The government's top watchdog and enforcer of federal spending law is currently investigating the legality of the freeze. Brian Finch, an attorney, suggests that the Trump administration may have some wiggle room in framing its pause as a "programmatic delay" rather than an impoundment.
Melissa Prock, another attorney, stated that the government can cancel a grant award for not aligning with "program goals or agency priorities," but only if such a clause were clearly and unambiguously made known to the grant recipient.
All grant recipients should be carefully reviewing the terms and conditions of their grant agreements to prepare for potential terminations. If the funding pause is allowed to proceed by the court, it could face resistance from the comptroller general, the head of the Government Accountability Office.
The comptroller general must report to Congress when a withholding of federal funds has taken place and the executive branch fails to send its own notification. If the GAO informs Congress a deferral has taken place, lawmakers in either chamber can force the White House to resume spending by passing a resolution with a simple majority.
The story has been updated to note the federal judge's temporary injunction. The National Association of Nonprofits and other groups brought the lawsuit challenging the freeze. The White House Press Secretary, Karoline Leavitt, stated that the president's actions are within the law.
As the situation unfolds, it is crucial for all grant recipients to plan for potential disruptions and carefully review the terms of their grant agreements. The GAO is examining the steps and information needed to determine if there are any Impoundment Act issues with respect to the administration's actions to pause funds.
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