Legal Battle Ignites Over Trump's Federal Funding Freeze

A U.S. District Judge in Washington, D.C. reviewed a request by advocacy groups to stop President Trump's administration's directive to freeze federal financial assistance. The directive is viewed as exceeding authority and potentially causing harm to nonprofits and small businesses, initiating legal challenges from states.

A U.S. judge in Washington, D.C. assessed a request filed by advocacy groups aiming to halt a directive from President Trump to freeze federal loans, grants, and financial aid. The hearing is pivotal in determining the directive's legality and its impact on nonprofits and small businesses nationwide.

Jessica Morton, representing advocacy groups, asserted the freeze would cause significant harm, arguing the Office of Management and Budget (OMB) overstepped its authority. Justice Department lawyer Daniel Schwei countered the claims, stating many litigating nonprofits do not directly receive grants, and that the impact is not as devastating as presented.

Additional opposition comes from multiple states planning to sue, highlighting the directive's legality and constitutionality. New York State Attorney General Letitia James, leading the initiative, declares the act as reckless. Also, claims concerning Medicaid payment system blocks challenge the broader implications of the administration's policy.

(With inputs from agencies.)