On January 27, 2025, the United States Office of Management and Budget (OMB) issued a directive instructing federal agencies to temporarily halt the distribution of federal grants and loans. The purpose of this action was to ensure that the funds were aligned with the priorities of the Trump administration.

Reaction from Organizations

This measure caused concern among numerous organizations that rely on these resources to keep essential programs running in sectors such as health, education, and social welfare. 

Legal Response

In response, several nonprofit organizations and advocacy groups filed lawsuits arguing that the funding freeze was unconstitutional, as Congress holds the authority over federal spending. Consequently, on January 28, 2025, federal judge Loren AliKhan of the District of Columbia issued a temporary injunction blocking the OMB directive, allowing the funds to continue flowing while legal proceedings were underway. 

Trump Administration’s Decision

A day later, on January 29, 2025, the Trump administration decided to rescind the directive before a scheduled court hearing, suggesting a possible reassessment of its strategy or a response to legal and social pressure.