Froze federal grants without Congressional authorization
January 27, 2025
Multiple Guardrails
Founders' Principles Violated
Guardrails Violated
Why Level 3?
Multiple guardrails bypassed: Congressional appropriations authority, Impoundment Control Act, separation of powers. Measurable harm to Congressional authority and grant-funded programs. Courts ruled action illegal.
What Happened
Context
OMB issued memo (M-25-13) directing freeze of federal grant payments, particularly targeting programs related to diversity, equity, and inclusion (DEI), without Congressional authorization.
Action Taken
Office of Management and Budget (OMB) issued memo M-25-13 on January 27, 2025 directing all federal departments and agencies to temporarily halt all activities related to awarding or disbursing federal financial assistance (grants, loans, etc.), except where legally or operationally impossible. The freeze was scheduled to take effect on January 28, 2025 at 5:00 PM EST. Multiple states and organizations filed lawsuits. Federal judge Loren AliKhan issued a preliminary injunction on January 28, 2025 blocking the freeze before it took effect, ruling it violated Congressional appropriations authority.
In His Own Words
"We need to review all grant programs for efficiency and alignment with administration priorities."
"Certain grant programs are under review pending further evaluation."
What's Wrong
Bypassed Congressional appropriations authority by freezing funds that Congress had already appropriated. Violated Impoundment Control Act of 1974 which limits executive power to withhold congressionally appropriated funds. Courts ruled the freeze illegal and unconstitutional.
Impact
Institutional: Sets precedent for executive withholding of congressionally appropriated funds. Legal: Multiple federal courts ruled freeze illegal and unconstitutional. Economic: Affected programs and organizations dependent on federal grants. Operational: Created uncertainty and disruption in grant-funded operations.