Independent Sector President and CEO Dr. Akilah Watkins, whose Washington, D.C., group is a national membership organization of nonprofits, foundations, and corporations focused on civil society, said in a statement: "The Trump administration's order to freeze federal grants threatens to undermine the essential health and safety of the communities nonprofits work tirelessly to support. While the full scope of its intended impact is still unfolding, it's clear this order jeopardizes vital services and sets the stage for inevitable battles ahead."

A group of organizations sued to block the pause, including the National Council of Nonprofits, American Public Health Association, Main Street Alliance, and SAGE (a New York nonprofit dedicated to improving the lives of lesbian, gay, bisexual, and transgender adults).

"This reckless action by the administration would be catastrophic for nonprofit organizations and the people and communities they serve," said Diane Yentel, chief executive of the National Council of Nonprofits. "From pausing research on cures for childhood cancer to halting housing and food assistance, shuttering domestic violence and homeless shelters, and closing suicide hotlines, the impact of even a short pause in funding could be devastating and cost lives. This order must be halted immediately before such avoidable harm is done."

Early Tuesday, Democrats on the Senate Appropriations Committee convened a hasty press conference.

"Is it woke to fund cancer research? Is it woke to rebuild an unsafe bridge?" asked Sen. Patty Murray (D., Wa.), who is the ranking Democrat on the Senate Appropriations Committee.

"Last night, President Donald Trump plunged the country into chaos without a shred of warning," said Senate Minority Leader Chuck Schumer (D, N.Y.). "It is a dagger to the heart of average American families in Red states and Blue States, in cities, suburbs and rural areas. It is just outrageous."

Schumer said that attorneys general from his state and others were going to court Tuesday to challenge the OMB impoundment.

The spending conflict reignites a long-running battle between Congress and some presidents over whether a president can refuse to spend money budgeted by Congress. The Constitution gives Congress the basic power over the federal purse.

After President Richard Nixon claimed the power to impound appropriated funds in 1973, Congress passed a law barring presidents from withholding enacted funding, unless certain procedures were followed. The Supreme Court has rejected challenges to that Impoundment Control Act.

Trump's nominee to run the OMB, Russ Vought, and his pick for OMB general counsel, Mark Paoletta, have previously argued that a president can impound budgeted funds. But OMB's Tuesday memo characterized the new freeze as just a pause.

"It is not an impoundment under the Impoundment Control Act," said the OMB memo. "It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President's Executive Orders, to the extent permitted by law."

"The American people gave President Trump an overwhelming mandate," said spokeswoman Leavitt, when asked about the constitutionality of the spending freeze.

-- Liz Moyer, Joe Light, and Janet H. Cho contributed to this report

Write to Bill Alpert at william.alpert@barrons.com

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(END) Dow Jones Newswires

January 28, 2025 17:27 ET (22:27 GMT)

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