A DC federal judge ordered the Trump administration Tuesday to keep distributing trillions in federal assistance, just as a days-long freeze was due to take effect at close of business.

US District Judge Loren AliKhan issued the temporary restraining order in response to an appeal by a coalition of nonprofit groups almost exactly 24 hours after acting Office of Management and Budget Director Matthew Vaeth ordered agencies to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.”

The Vaeth memo further admonished agency heads to “identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements.”

Lawyers for Democracy Forward represented the National Council of Nonprofits, the American Public Health Association, Main Street Alliance and the LGBTQ nonprofit SAGE in filing the suit to block the funding freeze.

“This Memo … will have a devastating impact on hundreds of thousands of grant recipients who depend on the inflow of grant money (money already obligated and already awarded) to fulfill their missions, pay their employees, pay their rent — and, indeed, improve the day-to-day lives of the many people they work so hard to serve,” the attorneys wrote in their complaint.

All open grants will continue to flow after the judge’s decision, which will remain in effect through 5 p.m. ET Feb. 3. 

A hearing is scheduled for that Monday to hear arguments on the lawfulness of OMB’s move.

The Justice Department noted in court filings that the nonprofits had not demonstrated the funding pause’s effect yet on agencies.

“I am very sympathetic to your argument that [the plaintiffs have] not identified a particular grantee that is going to be missing a paycheck from the federal government tomorrow, but I think that’s in part from the government’s own making,” AliKhan — an appointee of former President Joe Biden who was confirmed in a tie-breaking vote cast by former Vice President Kamala Harris —  told a Trump administration lawyer during Tuesday’s Zoom hearing, NBC News reported.

The OMB order outraged Democrats, who accused the White House of unlawfully refusing to spend money allocated by Congress and pointed to Medicaid and other online federal benefit portals being briefly shut down.

White House press secretary Karoline Leavitt pushed back in her first official briefing Tuesday that the move was “not a blanket pause on federal assistance” like Social Security, Medicare or food stamps.

“Assistance that is going directly to individuals will not be impacted by this pause,” Leavitt told reporters, adding later on X that “no payments” for Medicaid were “affected” and “the portal will be back online shortly.”

“What does this pause mean? It means no more funding for illegal DEI programs,” she went on at the White House. 

“It means no more funding for the Green New Scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies, no more funding for Green New Deal social engineering policies.”

Leavitt claimed that $50 million audited by the Department of Government Efficiency (DOGE) and OMB had even found taxpayers were going to be footing the bill for “condoms in Gaza.”

Another $37 million designated for the World Health Organization, which Trump pulled out of, was also among the frozen funds.

“Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities,” Vaeth wrote in the memo.

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

The OMB acting chief gave all agencies until Feb. 10 to ask for exceptions.

A group of state attorneys general from California, Illinois, Massachusetts, Rhode Island, New Jersey, and New York had also announced they were suing to block the order, with Empire State AG Letitia James calling it “unconstitutional.”

OMB Director-designate Russ Vought in a recent confirmation hearing, however, suggested the legislation preventing presidents from withholding funding was itself “unconstitutional.”

“The president ran on the notion that the Impoundment Control Act is unconstitutional,” Vought told members of the Senate Homeland Security and Governmental Affairs Committee last week. “I agree with that.”

The 1974 law limits the executive branch’s ability to not enact spending proposals passed by Congress.