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21 States and DC Challenge Trump’s Use of OMB Rule to Cancel Billions in Grants

They argue the rule was intended for narrow, evidence-driven terminations, making its broad use an overreach of executive spending authority.

Left: Russ Vought listens during a television interview at the White House, Oct. 21, 2019, in Washington, DC. Right: New York Attorney General Letitia James speaks during a news conference outside Manhattan federal court in New York on Feb. 14, 2025.
President Donald Trump speaks to the media in the Oval Office at the White House, Tuesday, June 10, 2025, in Washington, as Interior Secretary Doug Burgum, Director of the Office of Management and Budget Russell Vought and Secretary of Homeland Security Kristi Noem, look on. ( (AP Photo/Evan Vucci)
U.S. President Donald Trump sits inside a vehicle, after disembarking Air Force One, as he arrives to attend the world leader meeting of the North Atlantic Treaty Organization (NATO) in The Hague, at Amsterdam Airport Schiphol in Schiphol, Netherlands, June 24, 2025. REUTERS/Piroschka Van De Wouw
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Overview

  • A coalition of 21 Democratic attorneys general and the District of Columbia filed suit in Boston federal court to block the Trump administration’s termination of federal grants.
  • The lawsuit targets a 2020 Office of Management and Budget regulation clause that lets agencies end grants if they “no longer effectuates the program goals or agency priorities.”
  • Plaintiffs contend the regulation was meant for limited, evidence-backed cases and not for sweeping policy shifts after grant awards.
  • The funding cuts have affected education, healthcare, crime prevention, scientific research and other programs previously approved by Congress.
  • The case follows multiple state-led challenges that have temporarily halted similar cuts and could redefine the balance between executive action and congressional budget authority.