A federal judge ruled Monday that the administration appears to be illegally withholding funds previously approved by Congress for the National Endowment for Democracy, a nonprofit that supports democratic institutions and individual liberties across the globe.
U.S. District Judge Dabney Friedrich said the Trump administration has for months ”obstructed” tens of millions of dollars in funds intended for the group, forcing deep furloughs and defaults on grants — despite explicit language in federal law barring anyone but Congress from conditioning the disbursement of this funding.
The ruling by Friedrich, a Trump appointee, is one of the most significant benchmarks in the legal response to the Trump administration’s effort to test the president’s power to withhold congressionally approved funds.
Trump and his aides have made clear he believes he has the power to “impound” — or decline to spend — some congressionally required funding if he feels it does not align with his priorities. But that view conflicts with a 51-year-old law known as the Impoundment Control Act, which bars presidents from withholding federal dollars without congressional approval.
Friedrich’s ruling also comes at a tense moment in the standoff between the White House and Capitol Hill. There, many members of Trump’s own party are increasingly nervous about the possibility that budget chief Russ Vought will soon ask lawmakers to codify a second package of funding cuts after insisting on a vote last month to nix $9 billion for public broadcasting and foreign aid.
Meanwhile, Vought has openly floated the prospect of submitting a “pocket rescission” request, which is when the administration sends Congress a clawback request less than 45 days before the end of the fiscal year on Sept. 30 — and regardless of whether Congress decides to act, the White House would treat the funding as expired beginning Oct. 1.
The National Endowment for Democracy, founded in 1982 to promote democracy abroad, received a $315 million appropriation for the current fiscal year, and every year since its founding had received access to the full amount of its funding as soon as it was approved by Congress. But that changed in January, amid a blitz by the new Trump administration — backed by Elon Musk’s Department of Government Efficiency — to terminate federal programs and contracts en masse.
The Endowment sued the Trump administration in March as the organization was unable to access congressionally appropriated funds. Shortly after filing the suit, the Trump administration released a large portion of the withheld dollars, taking the sting out of the organization’s legal fight. But in recent weeks, the group said the administration had again started to slow-walk the disbursement of money, including some funds designated as “no year” funds — meaning they are available to be used without a deadline until they are expended.
“The defendants’ official justification for that withholding — preserving the Endowment’s funding stability for the coming year — is not plausible,” Friedrich wrote, finding that the administration threw up arbitrary roadblocks and hurdles.
Friedrich also emphasized that while there may be wiggle room for the administration to disburse funding on a slower schedule than the National Endowment for Democracy would prefer, its actions to date were indefensible.
In her ruling, the judge cited Vought’s own stance in support of the White House’s fiscal 2026 budget request to Congress, wherein he urged the lawmakers to defund the organization for political reasons in the next fiscal year “because of its alleged support of media organizations critical of the President and his allies.”
The National Endowment for Democracy’s lawsuit is just one in a deluge of legal challenges the administration is facing that allege that the administration is illegally withholding funds approved by Congress and signed into law. The cases across the country are challenging the freeze, cancellation and other roadblocks preventing agencies from accessing billions of dollars to which they ought to be entitled under the law.
In this case, Freidrich cited the administration’s “repeated maneuvers to impede the Endowment’s flow of funds.”
This latest decision follows another over the weekend by a three-judge panel that will require the Office of Management and Budget to revive a once-public database, which the administration took down earlier this year, showing how the OMB is advising agencies to spend government money.
The federal government’s top watchdog, the Government Accountability Office, has also issued five opinions in recent weeks finding that the Trump administration violated the Impoundment Control Act by withholding federal funds. The administration has repeatedly sought to undercut these determinations by publicly disparaging GAO and recommending to Congress that the office’s budget be slashed.
“They are going to call everything an impoundment because they want to grind our work to manage taxpayer dollars effectively to a halt,” Vought wrote on social media back in May.
Kyle Cheney contributed to this report.
