Democratic-led states challenge Trump's ability to slash grant funding

Source: Reuters

June 24, 2025 4:19 PM EDT Updated 1 hour ago


BOSTON, June 24 (Reuters) - Democratic state attorneys general filed a lawsuit on Tuesday asking a judge to declare that a key tool Republican President Donald Trump's administration has relied on to cancel federal grants is being used unlawfully to slash billions of dollars in funding.

In a lawsuit filed in Boston federal court, attorneys general from 20 states and the District of Columbia joined with Pennsylvania's governor to take aim at the administration's reliance on a regulation the White House budget office adopted during Trump's first term that strengthened the ability of agencies to cancel grant awards.

That regulation, which the White House Office of Management and Budget adopted in 2020, says agencies can terminate a grant if it "no longer effectuates the program goals or agency priorities." The Trump administration has relied on that language to cancel billions of dollars in funding to states and nonprofits in a bid to roll back federal backing for various projects, including those it sees as supporting diversity, equity and inclusion and climate change preparation.

It did so with the aide of the Department of Government Efficiency, which was spearheaded by billionaire Elon Musk. Numerous lawsuits have been filed challenging those grant terminations. Last week, a judge in Boston sided with Democratic-led states by declaring that the National Institutes of Health's termination of hundreds of grants because of their perceived link to diversity-related topics was unlawful.

Read more: https://www.reuters.com/legal/government/democratic-led-states-challenge-trumps-ability-slash-grant-funding-2025-06-24/