Washington: U.S. President Donald Trump suffered a legal setback on Tuesday as a federal appeals court declined to pause a lower court order requiring the administration to continue disbursing federal funds. The decision deals a blow to Trump’s efforts to freeze federal spending amid ongoing legal battles.
The U.S. Department of Justice had requested the Boston-based 1st U.S. Circuit Court of Appeals to halt an order issued on Monday by U.S. District Judge John McConnell in Rhode Island. McConnell ruled that the administration had defied his January 31 decision by continuing to withhold billions in federal funding, prompting him to reinforce his directive.
The Justice Department argued that McConnell’s order constituted “intolerable judicial overreach,” asserting that Trump’s authority to direct federal agencies in line with his policy objectives was “well-settled.” However, in a brief order, the three-judge appellate panel expressed confidence that McConnell would swiftly address concerns raised by the administration, including whether his ruling impinged on Trump’s executive authority.
This ruling marks the first significant appellate court setback for Trump’s policy agenda since his return to office on January 20. While the 1st Circuit did not completely foreclose the administration’s legal options, it stated that officials could file additional arguments by Thursday to seek a stay on McConnell’s order.
The three-judge panel comprised U.S. Circuit Judges David Barron, Lara Montecalvo, and Julie Rikelman—all appointees of Democratic presidents. The White House vowed to continue its legal battle, with press secretary Karoline Leavitt denouncing the injunctions as “a continuation of the weaponization of justice against President Trump.”
The ruling comes as Trump, members of his administration, and billionaire ally Elon Musk have increasingly criticized judicial interventions in executive decisions. Trump took to social media on Tuesday, claiming that “certain activists and highly political judges want us to slow down, or stop,” the administration’s efforts to eliminate government waste. Musk echoed similar sentiments, alleging on social media that “Democracy in America is being destroyed by judicial coup.” His remarks followed a New York judge’s decision to bar Trump’s Department of Government Efficiency from accessing Treasury Department systems, prompting Musk to call for the judge’s impeachment.
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Such statements have heightened concerns over whether the Trump administration will comply with court rulings. The American Bar Association, in a statement on Monday, warned of “wide-scale affronts to the rule of law itself” under Trump’s leadership.
The lawsuit before McConnell was filed by Democratic attorneys general from 22 states and the District of Columbia, challenging a White House Office of Management and Budget (OMB) memo that announced a spending freeze affecting trillions of dollars. Although OMB later withdrew the memo, McConnell ruled that a temporary restraining order remained necessary, citing evidence that a funding freeze was still in effect and that OMB’s withdrawal was merely “in name only.”
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This case is among several lawsuits filed by Democratic-led states, civil rights groups, and progressive advocacy organizations seeking to block Trump’s attempts to shrink the federal government, cut spending, and tighten immigration policies. On Friday, Democratic attorneys general urged McConnell to enforce his order, arguing that the administration was still withholding infrastructure and environmental funding under the Inflation Reduction Act and the Infrastructure Improvement and Jobs Act.
McConnell, who was appointed by Democratic former President Barack Obama, reaffirmed on Monday that his order was “clear and unambiguous” and prohibited any categorical freezes on federal funding. Rhode Island Attorney General Peter Neronha, who is helping lead the litigation, welcomed the 1st Circuit’s decision, stating that it ensures McConnell’s “order remains in full force, and we expect the administration to comply.”
