Federal Appeals Court Blocks Trump Administration's 'Sweeping' Funding Freeze

Ruling upholds lower court decision that the White House's budget office improperly directed agencies to halt trillions in federal assistance.

Mar. 17, 2026 at 6:10pm

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A federal appeals court in Boston largely upheld a ruling that blocked the Trump administration's 'sweeping and unprecedented' freeze on trillions of dollars in government financial assistance. The court found that the White House's budget office had improperly directed federal agencies to implement a categorical freeze on funding without considering the reliance interests of the recipients.

Why it matters

The funding freeze, which was instituted shortly after Trump returned to the White House, would have impacted up to $3 trillion in federal funding and raised concerns about the administration's efforts to roll back programs related to diversity, equity, inclusion, and climate change.

The details

The three-judge panel of the 1st U.S. Circuit Court of Appeals sided with Democratic attorneys general from 22 states and D.C. in finding that the Office of Management and Budget had directed agencies to freeze funds without properly assessing whether the payments were legally required or appropriate on a case-by-case basis. While the appeals court upheld the lower court's injunction blocking the policy, it overturned part of the order that required agencies to make payments to the suing states, citing a recent Supreme Court ruling.

  • In January 2025, shortly after Trump returned to the White House, the OMB issued a memo directing federal agencies to temporarily pause spending on federal financial assistance programs.
  • In March 2025, a lower court judge issued an injunction blocking the funding freeze policy.
  • On March 16, 2026, the federal appeals court largely upheld the lower court's ruling blocking the funding freeze.

The players

Donald Trump

The former U.S. president who instituted the funding freeze policy shortly after returning to the White House.

David Barron

The chief judge of the 1st U.S. Circuit Court of Appeals who wrote the majority opinion in the case.

John McConnell

The U.S. District Judge in Rhode Island who issued the initial injunction blocking the funding freeze policy in March 2025.

Democratic Attorneys General

Attorneys general from 22 states and the District of Columbia who sued to block the Trump administration's funding freeze.

Office of Management and Budget (OMB)

The White House budget office that directed federal agencies to implement the funding freeze.

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What they’re saying

“The Office of Management and Budget 'directed the agency defendants to freeze such funds without considering an obvious aspect of the problem — namely, the reliance interests of the recipients of the obligated federal funds that were to be frozen.'”

— David Barron, Chief U.S. Circuit Judge (Reuters)

What’s next

The White House has not indicated whether it will appeal the appeals court's ruling to the Supreme Court.

The takeaway

This case highlights the legal battles over the Trump administration's efforts to roll back federal programs and funding, particularly around issues like diversity, equity, inclusion, and climate change. The appeals court's ruling upholds the principle that the executive branch must consider the impacts on funding recipients before implementing sweeping policy changes.