A federal judge Tuesday ordered the Trump administration to take “immediate steps” to reinstate already awarded funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, after the president broadly froze the disbursements on his first day in office.
Judge Mary McElroy of the U.S. District Court for Rhode Island ordered the Departments of Energy, Housing and Urban Development, Interior and Agriculture, as well as the Environmental Protection Agency, to release awards previously withheld, after the ruling found the agencies lacked authority to freeze the funding.
The decision applies to all awardees nationwide, and will remain in effect until McElroy rules on the merits of the lawsuit. The agencies must update the court of the status of their compliance by 5 p.m. EST on Wednesday.
“Agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration,” McElroy wrote in her decision.
The decision is a blow to President Donald Trump’s plans to dismantle the Biden administration’s hallmark climate funding law. The Inflation Reduction Act, passed in August 2022, provides hundreds of billions of dollars in direct funding and loan financing. It also offers lucrative tax credits for manufacturers that meet domestic production requirements, incentivizing a host of companies to invest in domestic facilities over the past three years.
The Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, also provides billions of dollars in clean energy funding.
Following the funding freeze, six nonprofits — Woonasquatucket River Watershed Council, Eastern Rhode Island Conservation District, Childhood Lead Action Project, Codman Square Neighborhood Development Corp., Green Infrastructure Center, and National Council of Nonprofits — sued the agencies in March in a bid to access their awarded funding, after other court orders failed. McElroy’s grant of a preliminary injunction requires agencies to “turn the funding spigots back on” while the case is pending.
The judge wrote that the groups, which claimed the freeze violated the Administrative Procedure Act, successfully proved that the “sudden, indefinite freeze of all already awarded IIJA and IRA money was arbitrary and capricious: it was neither reasonable nor reasonably explained.” McElroy highlighted the need to offer relief to awardees nationwide, given the far-reaching impacts of the freeze on organizations’ operations and local reputations.
“After finding that the Government’s sweeping actions were likely unlawful, the Court cannot see why similarly situated nonparties should remain subject to them,” the judge wrote. “Nonparties in exactly the same circumstances should not be forced to suffer the harms just because there was not enough time or resources for them to join the suit.”
