President Donald Trump listens as Elon Musk speaks in the Oval Office at the White House, Tuesday, Feb. 11, 2025, in Washington. (AP Photo/Alex Brandon)
The Trump administration quickly pushed to withhold Federal Emergency Management Agency (FEMA) money sent to New York City to house migrants, saying it had "significant concerns" about the spending under a program appropriated by Congress. The Justice Department had previously asked the appeals court to let it implement sweeping pauses on federal grants and loans, calling the lower court order to keep promised money flowing "intolerable judicial overreach."
McConnell, who was appointed by former President Barack Obama, is presiding over a lawsuit from nearly two dozen Democratic states filed after the administration issued a memo purporting to halt all federals grants and loans, worth trillions of dollars.
"The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional," McConnell wrote, "and has caused and continues to cause irreparable harm to a vast portion of this country."
The administration has since rescinded that memo, but McConnell found Monday that not all federal grants and loans had been restored. He was the first judge to find that the administration had disobeyed a court order.
The Democratic attorneys general allege money for things like early childhood education, pollution reduction and HIV prevention research remained tied up even after McConnell ordered the administration on Jan. 31 to "immediately take every step necessary" to unfreeze federal grants and loans. The judge also said his order blocked the administration from cutting billions of dollars in grant funding from the National Institutes of Health (NIH).
The Boston-based First Circuit Court of Appeal on Tuesday rejected the Trump administration's effort to reinstate a sweeping pause on federal funding.
The federal appeals court said it expected U.S. District Judge John McConnell in Rhode Island to clarify his initial order.
U.S. District Judge Jeannette A. Vargas, who was appointed by former President Joe Biden, on Monday ordered lawyers to meet and confer over any changes needed to an order issued early Saturday by another Manhattan judge, Obama-appointee Judge Paul A. Engelmayer, that banned Elon Musk’s DOGE team from accessing Treasury Department records. Vargas instructed both sides to file written arguments if an agreement was not reached.
The order was amended on Tuesday to allow Senate-confirmed political appointees access to the information, while special government employees, including Musk, are still prohibited from accessing the Treasury Department's payment system.
On Friday, 19 Democrat attorneys general, including New York Attorney General Letitia James, sued Trump on the grounds that Musk's DOGE team was composed of "political appointees" who should not have access to Treasury records handled by "civil servants" specially trained to protect sensitive information like Social Security and bank account numbers.
Justice Department attorneys from Washington and New York told Vargas in a filing on Sunday that the ban was unconstitutional and a "remarkable intrusion on the Executive Branch" that must be immediately reversed. They said there was no basis for distinguishing between "civil servants" and "political appointees."
A worker removes the U.S. Agency for International Development (USAID) sign on their headquarters on Feb. 7, 2025, in Washington, D.C. (Kayla Bartkowski/Getty Images)
The Trump administration is expected to argue before a federal judge Wednesday that the U.S. Agency for International Development (USAID) is rife with "insubordination" and must be shut down for the administration to decide what pieces of it to salvage.
The argument, made in an affidavit by political appointee and deputy USAID administrator Pete Marocco, comes as the administration confronts a lawsuit by the American Foreign Service Association and the American Federation of Government Employees – two groups representing federal workers.
Washington-based U.S. District Judge Carl Nichols, a Trump appointee, on Friday ordered a temporary block on plans by the Trump administration to put 2,200 USAID employees on leave. He also agreed to block an order that would have given just 30 days for the thousands of overseas USAID workers the administration wanted to place on abrupt administrative leave to move their families back to the U.S. at the government's expense.
Both actions by the administration would have exposed the workers and their families to unnecessary risk and expense, according to the judge.
The judge reinstated USAID staffers already placed on leave but declined to suspend the administration's freeze on foreign assistance.
Nichols is due to hear arguments Wednesday on a request from the employee groups to keep blocking the move to put thousands of staffers on leave as well as broaden his order. They contend the government has already violated the judge's order.
In the court case, a government motion shows the administration pressing arguments by Vance and others questioning if courts have the authority to check Trump's power.
"The President's powers in the realm of foreign affairs are generally vast and unreviewable," government lawyers argued.
Fox News' Landon Mion and the Associated Press contributed to this report.
Danielle Wallace is a breaking news and politics reporter at Fox News Digital. Story tips can be sent to danielle.wallace@fox.com and on X: @danimwallace.
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