The courts blocked Trump’s federal funding freeze. Agencies are withholding money anyway.

When the federal courts first blocked the Trump administration’s funding freeze, Jessyca Leach was cautiously optimistic.

For days, the pause had prevented her from accessing the money she needs for her Phoenix health clinic to serve thousands of at-risk people, most of them poor and many of them members of the LGBTQ+ community. Things had gotten so bad that she had to lay off three employees and cut the salaries of her leadership team, including her own.

So when the funding started to flow again last week, days after the court orders, Leach hoped her ordeal would be over. It wasn’t.

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Her federal dollars were accompanied by an ominous note from the payment processing arm of the U.S. Department of Health and Human Services. Citing “Executive Orders regarding potentially unallowable grant payments,” the agency said that it would continue “taking additional measures to process payments” and that its reviews “will result in delays and/or rejections of payments.”

“If it’s not there,” Leach said of the federal money that covers the salaries for 40% of her staff, “things get really bad, really fast.”

The notice Leach received was one of several indications over the past week that the Trump administration is not backing down in its fight to slash spending and dramatically reshape the federal government, despite multiple court orders explicitly restraining the president’s sweeping executive actions. In some cases, to get around the judges’ rulings, the administration has cited a memo that it says is not subject to the existing orders. In others, it denied funding to organizations because their granting agencies are not defendants in one of the ongoing legal challenges. In others still, it has withheld funds by citing the agencies’ own judgment, not the president’s directives.

That argument in particular has been met with skepticism by one of the federal judges hearing lawsuits over the administration’s spending freeze. U.S. District Judge Loren AliKhan wrote in a Feb. 3 temporary restraining order that “the court is not persuaded that the continuing freezes are solely due to independent agency action” and that “both logic and record evidence point to the opposite conclusion.”

Nevertheless, the administration is pressing the same argument in a separate case brought by a coalition of 23 state attorneys general, who assert that the government continues to effectively pause spending in defiance of the court’s rulings. The administration denied that claim in a filing on Sunday, arguing that it is making “good-faith, diligent efforts to comply with the injunction” and that to the extent the court doesn’t agree with the government’s interpretation of the order, it should clarify “the intended scope of its temporary restraining order.”

On Monday, the judge overseeing that case, John J. McConnell Jr., did just that, ruling that the Trump administration had violated his restraining order by keeping funds frozen. He wrote that the government’s “broad categorical and sweeping freeze of federal funds” was “likely unconstitutional” and that it must immediately restore funding across the board, unless it could show the court “a specific instance where they are acting in compliance with this order but otherwise withholding funds due to specific authority.”

The Constitution gives Congress the power to tax and spend, but legal experts say the Trump administration’s actions set the stage for major challenges to that authority — and the well-established limits on the chief executive’s power to unilaterally cut off money that Congress has appropriated to groups he disagrees with. Many of the cuts are related to climate and diversity programs.

Past presidential administrations have tried to exert more control over spending, and President Richard Nixon took the fight to withhold funding to the U.S. Supreme Court. But his administration argued, unsuccessfully, on statutory grounds. No administration has found a constitutional argument compelling enough to bring to the U.S. Supreme Court, said David Super, constitutional law professor at Georgetown Law.

“The only hope the administration will have is someone will recognize the heretofore unrecognized power of the president to withhold money on their own,” Super said.

David Cole, a former legal director for the American Civil Liberties Union who also teaches at Georgetown Law, agreed, saying the president already has the means to pursue changes to federal spending, including majorities in both houses of Congress. “If he disagrees with the law that Congress has enacted, including an appropriation, he can urge Congress to amend the law,” Cole said. “Ideological disagreement with a law is not a justification for refusing to execute that law.”

Still, the Trump administration seems to be girding for potentially thousands of contract disputes. Super, however, said contract law is clear there too: both parties to the contract are bound to its terms.

“No contract I’ve seen has terms that allow a contractor to be dumped because someone doesn’t like their ideology,” Super said.

Neither the White House nor the Department of Health and Human Services responded to requests for comment for this story. But on Sunday, Vice President JD Vance telegraphed on social media the administration’s view on the series of court rulings blocking executive actions in the first three weeks of Trump’s presidency. “Judges aren’t allowed to control the executive’s legitimate power,” he wrote on X.

The legal battle kicked off after the Office of Management and Budget issued a two-page memo on Jan. 27 that required all agencies to identify and pause funding to programs that didn’t comply with executive orders Trump issued on his first day in office, “including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

That prompted two lawsuits — one filed in Washington, D.C., by a group of nonprofits and another in Rhode Island by states. Budget officials withdrew that OMB memo two days later. But the White House’s top spokesperson announced the following day that the executive orders would continue “in full force and effect, and will be rigorously implemented.”

Judges in both cases have temporarily blocked the administration from withholding spending based on the executive orders and the since-rescinded OMB memo.

In its notice to agencies about the rulings, though, government lawyers told leaders that they were still free to pause federal grants. In that document, the Department of Justice wrote that while federal officials couldn’t “pause, freeze, impede, block, cancel, or terminate” obligated money based on the administration’s January directives, agencies “remain free to exercise their own discretion under their ‘authorizing statutes, regulations, and terms,’ including any exercise of discretion to pause certain funding.”

It’s unclear how the administration will respond to Monday’s court order to unfreeze federal funding. But the resulting confusion caused by the various executive actions and court rulings may be the goal of the administration’s rapid-fire directives and its evolving justifications for withholding funds even after the judicial intervention, experts said. In the absence of clarity, groups that rely on federal funding could be forced to scale back or suspend operations.

“There are policy decisions that are being made by simply stirring all this up and creating uncertainty and confusion,” said Don Kettl, a professor emeritus and former dean in the School of Public Policy at the University of Maryland.

That’s what’s happening at the Walker Basin Conservancy, an environmental nonprofit that is relying on federal grants to restore a shrinking lake in rural Nevada.

“On the same day, I will have conversations with different people, often in the same office, who have different understandings,” said Peter Stanton, the group’s CEO. “It’s just a mess.”

The conservancy needs the money for restoration work on public lands in the basin, work that creates local jobs. But in a phone call on Wednesday with the Department of Interior agency that oversees the group’s grants, Stanton said he was told he would get no money from awards that involve funds from two laws that were passed by Congress while Joe Biden was president: the Bipartisan Infrastructure Law and the Inflation Reduction Act. The Interior Department did not respond to ProPublica’s request for comment.

The confusion is influencing big spending decisions that need to be made soon, such as hiring a seasonal workforce. “There will be an inflection point where the chaos and lack of clarity itself begin to drive those decisions,” he said.

Injecting even more uncertainty into the mix, Trump can issue executive orders “faster than opponents can file suits to stop them or courts can decide the cases,” Kettl said.

On Thursday, Trump did just that, issuing another order that directs agency heads to review grants to nongovernmental organizations, many of which, the order said, “are engaged in actions that actively undermine the security, prosperity, and safety of the American people.”

Legal observers say these moves should not have come as a surprise.

Four years ago, on the last day of Trump’s first presidency, Russell Vought and Mark Paoletta, who then, as now, served as top budget officials, wrote in a 14-page letter to a congressional committee that a 1974 law asserting Congress’ powers over the purse was “an albatross around a President’s neck.” In another part of the letter, they said that the president “must be permitted to take time to consider how to best execute” spending federal dollars and that “if that requires a temporary pause in spending, it must be permitted.”

The extent and breadth of the administration’s efforts to control domestic spending appropriated by Congress is still unclear. In affidavits filed late Friday night, officials from across the country detailed the scope and disruption at the state level.

In New York, a top accounting official wrote that, as of Wednesday, the state could not access money that low-income people use to buy groceries, a block grant for maternal and child health services and nearly $6 million in education funding. In New Mexico, the official who heads services for the elderly and disabled adults said further spending pauses could force them to stop delivering hot meals.

Individual grantees who received far smaller sums were no less concerned as they struggled to get clear answers from the government.

Soon after Trump issued his executive orders, Hally Strevey emailed her grant officers at the Bureau of Reclamation about the $600,000 in grants her organization had been awarded under the Biden-era Bipartisan Infrastructure Law to restore a section of the Poudre River in Colorado to prevent future floods. “Since your agreement is already in place and awarded, you should actually be fine,” one wrote back on Jan. 23, “and this current situation will not impact your ability to draw down funding.” Four days later, she wrote again, pasting a link to a Washington Post story detailing the budget memo that called for a sweeping freeze of federal funds and asked, “Is our funding still safe given this latest news?”

An official confirmed receipt of that email but didn’t answer her question. Unable to access her money, she emailed the help desk of the federal grant payment system on Wednesday, after the court rulings, and finally learned the truth: “the grants are suspended.” The next day, her federal grant officer responded, citing another budget memo, which was not at issue in either of the cases challenging the administration’s spending pauses. Pursuant to that document, all funding related to the Bipartisan Infrastructure Law and the Inflation Reduction Act “has been paused,” the official wrote.

“Even though I was anticipating it, deep down you’re like, that’ll never happen,” Strevey said. “And then it did.”

The Bureau of Reclamation did not respond to a request for comment.

Jillian Blanchard, vice president of climate change and environmental justice at Lawyers for Good Government, said that by freezing the grants, the Trump administration had broken a binding contract. “It is illegal to pause legally obligated funds for policy reasons without congressional approval, which is what is happening,” she said.

The administration has not always stated policy reasons though. Instead, in some cases, it has blamed the grinding machinery of government bureaucracy.

On Thursday, for example, a Department of Justice lawyer denied the administration was not abiding by the court’s rulings in one of the two cases challenging the government’s spending freezes, this one brought by a coalition of state attorneys general. He told an attorney representing Oregon that the Environmental Protection Agency was “working through the process of unsuspending grants, which is taking some time given the nature of the process.”

In another email, the same official wrote to a lawyer for New York that the delays in releasing funds to the state were not examples of the administration’s obstinance but were instead “very likely related to” the federal Payment Management System’s “ongoing process of working through the unusually large number of payment requests they received.”

In a filing, the lawyer explained the cause of the “operational delay,” writing that in the four days after OMB issued the spending freeze memo that kicked off the litigation, so many grantees tried to draw down funds — in many cases for their full grant balance — that the payment system automatically flagged 7,000 of them as unusual, prompting further review. As of Sunday, the lawyer wrote, the backlog was fewer than 600 requests.