A federal appeals court on Wednesday rejected the Trump administration’s attempt to suspend the disbursement of federal aid through a memorandum issued by the Office of Management and Budget. The U.S. Court of Appeals for the 1st Circuit upheld a lower court’s ruling, denying the administration’s motion to stay that decision.
In January, the administration moved to pause all aid disbursements pending review, prompting multiple lawsuits, including one from over a dozen state attorneys general. Although the administration later rescinded the memo, the court found the potential harm to states justified halting the blanket pause.
The three-judge panel, composed of appointees from the Obama and Biden administrations, ruled the states would face “irreparable harm” including new debt obligations, disrupted operations, and delayed research. The court noted the administration did not dispute the severity of those harms, arguing only that funds would eventually be disbursed if legally required.
The ruling comes amid broader legal challenges to the administration’s policies, including its use of the Alien Enemies Act and efforts to restructure the federal government through the Department of Government Efficiency.
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