A federal judge has ordered the Trump administration to immediately reinstate funding previously awarded under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), after President Trump froze these disbursements on his first day back in office. The ruling, delivered by Judge Mary McElroy of the U.S. District Court for Rhode Island, mandates that several federal agencies, including the Departments of Energy, Housing and Urban Development, Interior, Agriculture, and the Environmental Protection Agency, release funds that had been withheld, asserting that these agencies lacked the authority to pause the funding.
The IRA and IIJA direct hundreds of billions of dollars for infrastructure and clean energy projects that required significant lighting, such as roadway and other transportation lighting, as well as significant EV charger projects. Restoration of this funding can directly benefit the lighting & EV charger industries.
The Inflation Reduction Act, enacted in August 2022, represents one of the Biden administration’s signature climate policies, allocating hundreds of billions of dollars for clean energy, manufacturing, and climate resilience projects. It includes direct funding, loan financing, and tax credits to incentivize domestic production and investment. The IIJA, also known as the Bipartisan Infrastructure Law, similarly provides billions for clean energy and infrastructure projects.
Upon returning to office, President Trump issued an executive order-part of a broader “Unleashing American Energy” initiative-directing federal agencies to halt the distribution of funds from both the IRA and IIJA. This move was positioned as a rollback of Biden-era climate and energy policies and was accompanied by other actions, such as ending the electric vehicle mandate and withdrawing the U.S. from the Paris Agreement. The White House clarified that the funding freeze would apply only to programs implicated by the new administration’s policy, but the executive order’s broad language led to an indefinite and sweeping pause, affecting a wide range of projects nationwide.
The funding freeze triggered immediate backlash from nonprofits, local governments, and businesses that had already been awarded grants or contracts. Six nonprofits-including the Woonasquatucket River Watershed Council, Eastern Rhode Island Conservation District, and National Council of Nonprofits filed a lawsuit in March, arguing that the freeze violated the Administrative Procedure Act (APA) and the Constitution’s separation of powers by overriding congressional appropriations. They cited severe disruptions to critical projects, job losses, and threats to organizational missions as a result of the indefinite pause.
Judge McElroy’s 63-page ruling found that the agencies’ actions were “arbitrary and capricious,” lacking reasonable explanation or legal justification. She emphasized that federal agencies do not possess “unlimited authority to further a President’s agenda” or the power to indefinitely suspend statutes passed by Congress. The decision applies nationwide and will remain in effect until a final ruling is made on the merits of the lawsuit.
The judge further noted the broad harm caused by the freeze, stating that “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.” This led her to require relief for all affected awardees, not just the plaintiffs.
The ruling is a setback for Trump’s efforts to dismantle Biden’s climate agenda and signals judicial resistance to executive overreach in altering congressionally mandated funding. Agencies were given a deadline to update the court on their compliance with the order, and failure to do so could result in contempt proceedings. The preliminary injunction restores the flow of billions of dollars for climate, infrastructure, and public health projects while the case proceeds.
The court’s decision reinforces the constitutional balance of powers, ensuring that executive actions cannot override legislative appropriations, and provides immediate relief to organizations and communities relying on IRA and IIJA funding.
More information is available here.
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