Trump asks US court to end 'judicial overreach' and allow funding freezes

By Nate Raymond

BOSTON (Reuters) - President Donald Trump's administration has asked an appeals court to put on hold a U.S. judge's decision forcing it to comply with his order barring it from freezing federal grants, loans and other financial assistance, saying the decision constituted "intolerable judicial overreach."

The U.S. Department of Justice asked the Boston-based 1st U.S. Circuit Court of Appeals late on Monday to put on hold an order that a Rhode Island federal judge issued earlier that day, after finding the administration had defied his January 31 ruling by continuing to withhold billions of dollars in federal funding.

Monday's order marked the first time since Trump returned to office on January 20 that a court had found his administration was violating a court order blocking part of the Republican president's agenda.

The Justice Department said U.S. District Judge John McConnell had improperly attempted to wrest power from Trump, whose authority to direct agencies to carry out actions consistent with his policy preferences was "well-settled."

"This state of affairs cannot be allowed to persist for one more day," the Justice Department lawyers wrote. "A stay pending appeal is warranted."

But a group of Democratic state attorneys general argued that if McConnell's order was paused, Trump "would immediately be free to resume this sweeping and illegal policy," harming those who rely on federal funding.

Those Democratic attorneys general from 22 states and the District of Columbia had sued after the White House's Office of Management and Budget issued a memo announcing a freeze that implicated trillions of dollars in spending.

OMB later withdrew that memo. But McConnell had concluded that a temporary restraining order was still necessary because of evidence that a funding freeze remained in effect and that OMB's recision of the memo was in "name-only."

The Democratic state attorneys general on Friday urged McConnell to enforce that order, saying the administration had taken the position that it could still withhold billions of dollars in infrastructure and environmental funding under the Inflation Reduction Act and the Infrastructure Improvement and Jobs Act.

McConnell, an appointee of Democratic former President Barack Obama, said on Monday his earlier order was "clear and unambiguous" and barred all categorical pauses or freezes in federal funding.

(Reporting by Nate Raymond in Boston; Editing by Rod Nickel)