• A federal judge heard arguments Friday in Providence on whether to extend an order blocking the federal government from freezing funds allocated to states.
• Democrat-led states argued that the freeze on “categorical” funding is unlawful and has caused chaos and uncertainty for important programs.
• A Justice Department lawyer argued that the states’ complaint is overly broad and that the president has the authority to pause spending.
• The judge said he hopes to issue a ruling in the coming week and has left in place an order to keep federal money flowing to states.

PROVIDENCE – A federal judge heard arguments Friday in the high-stakes battle about whether to extend an order blocking the federal government from freezing money states rely on for services ranging from child care to disaster relief to Medicaid payments.

U.S. District Chief Judge John J. McConnell Jr. weighed a request by close to two dozen Democratic states to block the federal government from withholding billions in aid until agencies ensure that all spending aligns with President Donald Trump’s priorities on “woke” gender ideology, climate goals and foreign aid.

States operate on “carefully orchestrated” payment systems that depend on promised and appropriated federal aid for their budgeting, Rhode Island Assistant Attorney General Sarah Rice told the court Friday.

The “categorical” federal funding freeze enacted shortly after Trump took office, creating chaos and throwing child care services and Head Start programs into disarray and uncertainty, is contrary to the law, Rice said.

“We don’t know how long these pauses might have gone on” without court intervention, Rice said.

Despite McConnell’s previous court orders halting any freeze, “an outage has continued to this day,” she said. The harm, she said, is irreparable, impacting crucial services, programs and payrolls.

“The people who provide the care need to be paid,” Rice said.

Federal response: States’ complaint is ‘abstract’

A U.S. Department of Justice lawyer urged the court to reject the states’ request, faulting it as overly broad, “abstract” and “across-the-board.” If the court grants an injunction, federal agencies will be hamstrung from making spending choices based on their own discretion, he said.

“The president is allowed to tell an agency if you have the discretion to pause if you should pause,” Department of Justice Special Counsel Daniel Schwei said.

Schwei drew parallels between Trump’s funding directive and former President Joe Biden’s decision to halt money for a border wall.  Executives have regularly exercised their power to halt spending based on their priorities, he said.

The pause, he said, at most impacted the timing of payments and had been withdrawn within days, a step the government has argued makes the case moot.

‘A political term of art’

McConnell questioned how the government’s order to ensure it aligned with Trump’s priorities shouldn’t be viewed as arbitrary in itself. The judge noted that it referred to a Green New Deal – which in reality doesn’t exist. 

“It’s a political term of art,” McConnell said.

Schwei said the order was only directing agencies to use their own discretion to save money.

He hit back, too, against McConnell’s reference to a Trump press secretary’s comments implying that the federal government wasn’t complying with the court’s previous court orders. 

McConnell granted the states a temporary restraining order in late January and later a second “emergency” order directing the federal government to comply or face possible contempt.

Schwei said the breadth of those orders make it difficult for the government to comply.

Neronha: ‘He could have gone to Congress’

Rhode Island Attorney General Peter F. Neronha, whose office is leading the states’ lawsuit, said after the proceedings that he thinks the injunction will be granted because the states have a good case.

“Trump’s executive orders and the subsequent memos sent to federal agencies have ‘sidelined’ Congress, and to an extent the courts, and if Trump wanted to reallocate the funds, he could have gone to Congress, which his party controls, to move the funds through the recision process,” Neronha said.

The injunction is necessary because the federal government can’t be trusted to keep its word and to prevent the Trump administration from issuing a similar memo later, he said.

McConnell said he hopes to issue a ruling in the coming week on the state’s bid for an injunction and left in place an order to keep federal money flowing. 

Travel of the case

The states’ challenge to Trump’s freeze on spending landed in federal court in Rhode Island last month after authorities directed agencies to ensure spending complied with the administration’s priorities. 

McConnell agreed to indefinitely block the freeze on federal spending, calling the president’s claims of executive authority “constitutionally flawed.” Days later, the court directed the federal government to comply with with the order after states complained that money continued to be withheld. McConnell warned that the government could be found in criminal contempt. 

The 1st U.S. Circuit Court of Appeals struck down the government’s bid for a stay of McConnell’s orders, finding that the judge had left room for officials to seek relief, if necessary. 

With reports from Wheeler Cowperthwaite