https://natlawreview.com/article/federal-grant-funding-thaw-freeze
Federal Grant Funding: A Thaw in the Freeze?
Normalcy? Returns– Thursday evening into Friday morning, Medicaid agencies reported irregularities in accessing funding portals and drawing down federal funds. We have heard from providers that access to their 330 PHS grant funds has been restored. At the same time, we have reports that some agencies (such as the National Science Foundation) are still reviewing grant programs for compliance with the Trump Administration’s Executive Orders. For now, however, the status quo for grant funding seems largely to have been preserved.
The Legal Battle Continues – A coalition of Democratic Attorneys General filed a lawsuit in Rhode Island earlier this week to oppose the OMB Memo and associated funding freeze.1 The judge in that case held a hearing to determine whether the legal challenge was moot, given the rescission of the OMB Memo. Citing communication from the press secretary, Judge McConnell indicated a willingness to still enter some kind of protective order related to the actions underlying the OMB Memo, even if the OMB Memo itself had been rescinded. Late afternoon on January 31, Judge McConnell issued a temporary restraining order in this case, which will last through a hearing and decision on the states’ motion for a preliminary injunction.2 On the morning of February 3, the DOJ responded with a notice of compliance outlining the Administration’s response to the TRO.
What Now? – Whatever the final legal outcome from the Rhode Island case, it seems clear that the Executive Branch is intent on reviewing federal grant programs for compliance with its policy directives. We know, based on OMB’s rescinded Memo, the initial list of programs on the Administration’s radar. Subject to any final disposition in the AG suit, we expect additional action in the coming weeks and months with respect to these programs, and providers should be aware of the potential impact on their organizations up to and including the inability to access funds previously appropriated and awarded.
They are absolutely entitled to review grant programs as detailed in the highlighted passage. What they aren't entitled to do is stop that funding that has already been appropriated during that review. Courts have already reviewed this issue multiple times in the past and always decided against the current position held by the Trump administration.
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