Blue states sue to stop White House funding cuts before they happen

MANHATTAN (CN) — For the past several months, dozens of lawsuits have cropped up in response to the Trump administration’s sweeping cuts to federal funding.

But on Tuesday, a coalition of 21 Democratic states and the District of Columbia went on the offensive by suing the administration over the controversial provision it’s been using to justify those cuts: a clause from the Office of Management and Budget that states a grant can be terminated if it “no longer effectuates … agency priorities.”

When announcing the suit at a Tuesday press conference, New Jersey Attorney General Matthew Platkin said the Trump administration has been using those five words to terminate billions of dollars of grant funding for public health, counterterrorism, transportation, infrastructure and education.

Platkin and other attorneys general have already won several court orders to return that cut funding. But Platkin hopes the new lawsuit, which targets the five words in that little-known provision, will stop future spending cuts before they happen.

“We can’t just sit back and wait for the next set of cuts,” New Jersey Attorney General Matthew Platkin said Tuesday when announcing the suit.

The scrutinized provision was enacted in November 2020, the waning days of President Donald Trump’s first administration, and stated that a federal grant can be pulled if it “no longer effectuates the program goals or agency priorities.”

The rule change went largely unnoticed for the four years of Joe Biden’s presidency, until Trump took office for his second term earlier this year and immediately started using it as justification to pull billions of dollars in federal funding.

“We’re seeking a court order making clear the federal agency’s lack of authority to use this five word provision buried deep in OMB regulations to terminate billions of dollars of federal funds appropriated by Congress on a whim,” Platkin said.

In their lawsuit, the states claim that the administration directly cited that language to justify pulling grants over the past several months.

Several of the suing states, including New York, New Jersey and California, say they received letters terminating millions of dollars in funding intended to modernize their unemployment insurance systems because they “no longer effectuate the U.S. Department of Labor’s priorities for its grant funding.”

“Federal agencies have engaged in this nationwide slash-and-burn campaign by unlawfully invoking a single subclause buried in federal regulations,” the states claim.

The results have been devastating, according to the states.

“With the stroke of a pen, federal agencies have deprived states of critical funding they rely on to combat violent crime and protect public safety, equip law enforcement, educate students, safeguard public health, protect clean drinking water, conduct life-saving medical and scientific research, address food insecurity experienced by students in school, ensure access to unemployment benefits for workers who lose their jobs, and much more,” they wrote.

In doing so, the states argue that the Trump administration is exceeding the “limited authority to terminate grants” for which the clause allows. It’s also violating separation of powers, the states claim, since Congress is typically the arm of government that approves funding.

“On top of causing dangerous chaos and confusion, these cuts are simply illegal,” New York Attorney General Letitia James said in a statement. “Congress has the power of the purse, and the president cannot cut billions of dollars of essential resources simply because he doesn’t like the programs being funded.”

The lawsuit names multiple executive departments and their heads as defendants, including the Office of Management and Budget, the Department of Commerce, the Department of Defense, the Department of Homeland Security and the State Department.

The multi-state coalition behind Tuesday’s complaint includes New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont and Wisconsin.

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