Flabbergasted by the Funding Freeze? Here’s What Could Happen Next.

Here’s the state of play: The Trump administration has continued to withhold already-obligated funding from the Inflation Reduction Act and the Bipartisan Infrastructure law from state and local governments, nonprofits, companies, and other entities.

More than a dozen groups have filed lawsuits challenging the Trump administration’s suppression of congressionally appropriated funds that don’t align with his political agenda, and several district courts have responded by placing restraining orders on the pause. And yet Trump and his cabinet have mostly ignored these orders, keeping many awardees in limbo.

This funding freeze, as it has come to be known, is far-reaching, affecting farmers, universities, health research, and international aid. But even just within our little climate corner of the universe, its effects are sweeping and could majorly undercut efforts to reduce emissions. Weatherization assistance programs, electrical vehicle charging funds, grants for innovative climate technologies and cleantech manufacturing facilities, and so much more, are under threat.

What happens now? Especially in light of the Trump administration’s defiance of court orders to get the money flowing again, I wanted to better understand how all of this could possibly play out. So I brought my questions to Romany Webb, the deputy director of the Sabin Center for Climate Change Law at Columbia University. Here’s what I learned.

Are there any notable differences among the lawsuits?

The most significant differences are the parties that filed them and the parties they were brought against, Webb told me. For example, there are two cases that name the Office of Management and Budget, or OMB. One was brought by a group of states, the other by a group of nonprofits. Both seek an injunction on the funding freeze, and in both cases, the judge has issued a temporary restraining order. But in the state case, the restraining order is worded in a way that it could be interpreted to only apply to the states named in the case, said Webb. “So basically, it would only require unfreezing of funds that were due to those states. Whereas the order that was issued in the other case was broader.”

Is there a bigger legal decision that could come out of this?

The big question is whether the president has the authority to hold back, a.k.a. impound funds that have been appropriated by Congress, said Webb. A law called the Impoundment Control Act, passed in 1974, says the president must first make a public request to Congress to rescind specific funds; they can pause spending for 45 days while waiting for a response, but not longer.

There’s no evidence, in this case, that President Trump sent such a request. And while the freeze on foreign aid is supposed to last 90 days, there was no time period specified for the general pause and review of climate-related funds. But Trump has called the Impoundment Control Act unconstitutional. “It does seem to me that these early actions freezing federal funding are really setting up that big question for the Supreme Court to hear and decide.”

What happens between now and the Supreme Court?

One of the bases on which plaintiffs are challenging the Trump administration in these cases is the violation of the Impoundment Control Act. “In response to that argument, the administration might argue to the court, well, actually the Impoundment Control Act is unconstitutional, so we were never required to comply with that act,” Webb told me. The lower courts will rule on that argument, parties will appeal, and eventually it will make its way to the highest court. If the Impoundment Control Act is on the table, that’s the sort of issue the Supreme Court will want to weigh in on.

Somewhere along the way, the various cases will likely be consolidated, Webb said, or one of the lower courts may pause its review until one of the other cases is decided. I asked how long she thought this would take to get to the Supreme Court, but she declined to speculate.

“These cases have been heard on a relatively expedited schedule. We’ve seen these initial actions being taken relatively quickly by the courts, like the temporary restraining order and so forth, but it’s really hard to predict how long that will all take to play out.”

Why aren’t we seeing private companies challenge the funding freeze?

Webb posited that private companies are in a difficult position. The Trump administration has said it is reviewing contracts to identify projects that are inconsistent with the president’s policy priorities. Some private companies may be hoping they’ll make it out the other end of that process. “My sense is that at least some of the private sector entities in this space are just waiting to see what will happen next,” she said.

If some money starts flowing again, how would that affect the existing lawsuits?

It’s unclear. Webb said that if the freeze were legitimately lifted then that would “moot the case.” If specific grants or programs get canceled, new suits will have to be filed. But because the freeze is so broad, it may be difficult to determine whether it has or has not been lifted. Webb suggested that the courts might also allow states to amend their complaints to be more targeted.

What does it mean for the president to defy the courts’ orders? Does the Constitution have an answer for this?

Webb said it was "extremely concerning.” The three branches of the U.S. government, with their checks and balances, are designed to protect against these situations. “It depends, though, on whether the various branches will really step up and fulfill their functions and provide a true check on the executive,” said Webb.

In a recent opinion article for The New York Times, two constitutional law professors from New York University described the various powers that courts have to respond. If the Trump administration continues to flout the court, they wrote, “the courts would be likely to issue further orders, with increasingly strict and specific requirements such as a due date.” If the administration still doesn’t comply, the government’s lawyers could face disbarment. The court could issue fines, hold officials in contempt of court, or to really escalate things, it could hold them in criminal contempt, which would move the matter to the U.S. attorney to prosecute. Alternatively the court could jail officials found to be defying the court’s order.

That said, Trump has the power to pardon criminals and to order the U.S. Marshals Service not to make the court-ordered arrests, so these avenues may be roads to nowhere. The path the scholars end on is perhaps the darkest timeline but also the most reassuring one:

“The chaos precipitated by so radically destabilizing the judiciary and the rule of law might well have serious economic consequences, including in the stock markets,” they write. “Foreign investment would likely flee the country; the dollar would fall. This would bring added pressure on the White House to comply with the courts and on Congress to demand such compliance.”

What about the potential for the Trump administration to violate all of these binding contracts? Is that separate from the impoundment question?

Yes and no. Webb said it’s still early, and it’s unclear whether the funding freeze has resulted in the breach of any of the government’s contracts yet. They all have slightly different terms, but the payments are usually set up to be disbursed in tranches. If the freeze does delay payments beyond their contractual timelines, the existing court cases challenging the funding freeze may raise that argument. But the administration is also looking for contracts to cancel. All of these contracts have termination terms, and can’t just be cancelled for no reason, so we may see new cases around unlawful terminations. “I think we will see a lot of attempts to argue that federal awardees are not in compliance with their contracts,” Webb told me.

She also noted that under the first Trump administration, the Department of Health and Human Services tried to cancel some awards that were made under a Teen Pregnancy Prevention Program on the basis that it did not align with the president’s priorities and the courts rejected that argument. “Assuming the courts continue to hold that view, the Trump administration couldn’t just say, we’re going to terminate your grant for work on solar energy, because we hate solar energy.”