U.S. President Donald Trump faced a legal setback as the 1st U.S. Circuit Court of Appeals rejected his administration’s attempt to pause a ruling requiring the government to continue distributing federal funds. The Justice Department sought to overturn U.S. District Judge John McConnell’s order, arguing that Trump had the authority to direct spending policies. However, the appeals court declined, stating McConnell would clarify concerns over executive authority.
This marks the first appellate loss for Trump since returning to office on January 20. The White House vowed to keep fighting, calling the injunctions “weaponization of justice.” The panel of judges—appointed by Democratic presidents—allowed the administration to file further motions by Thursday.
Trump and allies, including Elon Musk, have criticized judicial rulings that block his policies. Musk called it a “judicial coup” after a judge restricted his Department of Government Efficiency from accessing Treasury systems. Concerns are growing over whether the administration will comply with court orders. The American Bar Association warned against threats to the rule of law.
The lawsuit, brought by Democratic attorneys general from 22 states and D.C., challenged an Office of Management and Budget (OMB) memo freezing federal spending. Though OMB withdrew the memo, McConnell ruled a restraining order was necessary, citing ongoing funding delays. The decision prevents categorical funding freezes, particularly for infrastructure and environmental projects under key federal acts.
Rhode Island Attorney General Peter Neronha, leading the case, emphasized that McConnell’s order remains in effect. This case is one of many legal battles opposing Trump’s efforts to cut government spending and reshape federal programs. The administration is expected to continue seeking ways to push its fiscal policies despite legal challenges.