U.S. District Judge Indira Talwani in Boston ruled on July 17 that the Trump administration cannot rely on an Office of Management and Budget regulation to terminate billions of dollars in federal grants because they no longer align with the president’s priorities.
Talwani granted a summary judgment preventing the administration from using the clause to make cuts and denied the government’s motion to dismiss the lawsuit brought by 23 states and the District of Columbia. The states, led by Massachusetts, New York, and New Jersey, argued that the administration was wrongly invoking the regulation to revoke grants after they had been awarded.
The disputed clause, first introduced in 2020 during Trump’s first term and revised further, allows agencies to terminate a grant if it “no longer effectuates the program goals or agency priorities.” According to Reuters, the Trump administration has relied on this language to cancel grant funding it views as supporting causes such as diversity, equity and inclusion initiatives and climate change preparedness programs.
Talwani, who was appointed by Democratic President Barack Obama, ruled that “the clause does not permit agencies to terminate grants based on program goals and agency priorities identified after grants were awarded.” She wrote that the administration’s interpretation “has no basis in law” and that agencies cannot impose such a condition on spending without violating the U.S. Constitution. The regulation, she said, “demands only that grantees be apprised of those goals and priorities before grants are awarded.”
According to AP News, the states said that federal agencies had already terminated billions of dollars in funding used to support universities, initiatives to combat crime, and school lunch programs. They also said 1,100 active grants worth over $5 billion remained at risk absent a ruling in their favor.
New Jersey Attorney General Jennifer Davenport, a Democrat, said the ruling “confirms that the Trump administration defied the law when it embarked on its campaign to gut critical federal funding to the states.” She continued: “The President and his allies cannot hold critical programs hostage to their personal whims and political ideologies, destabilizing the country by yanking essential federal funding that was already awarded to the states.”
The White House had no immediate comment on the ruling, according to Reuters.
Sources
- Reuters — the core ruling and Judge Talwani’s reasoning on the OMB clause interpretation and constitutional violations
- AP News — details on the 23-state lawsuit, the $5 billion at risk, and New Jersey Attorney General Davenport’s statement
