WASHINGTON D.C. (KEYT) – A federal judge in Massachusetts has blocked the Trump Administration from unilaterally terminating billions in grant funding for states already appropriated by Congress.
"Plaintiffs—twenty states, three governors, and the District of Columbia—brought this action against Defendants U.S. Office of Management and Budget, Russell Vought in his official capacity as Director of the OMB, and various grant-making Executive Branch agencies and their heads in their official capacity," opened Friday's summary judgement by District Judge Indira Talwani. "The parties dispute the basis on which, pursuant to the Termination Clause, Defendant-Agencies may terminate currently awarded grants or grants Defendant-Agencies may later award Plaintiff-States."
Federal law details how the the executive branch can lawfully terminate federal awards, but, beginning last year, the Office of Management and Budget began using one particular clause to terminate grants approved by Congress in a novel way.
"The Trump Administration has claimed that five words in this Clause [2 C.F.R. § 200.340(a)(4)]—'no longer effectuates . . . agency priorities'—provide federal agencies with virtually unfettered authority to
withhold federal funding any time they no longer wish to support the programs for which Congress
has appropriated funding," plaintiffs argued in their lawsuit filed in June of last year. "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. Federal agencies have done all of this without any advance notice, without any explanation to the State recipients, and in direct contravention of the will of Congress."
"Plaintiffs are not aware of a single instance prior to January 2025 in which a federal agency relied on the Clause to terminate a grant on the grounds that agency priorities had changed after the award of the grant," added the plaintiffs.
According to the plaintiffs, employees at DOGE were formally directed to terminate grants en masse under the authority of Executive Order 14222 issued in February of last year.
"This order [Executive Order 14222] commences a transformation in Federal spending on contracts, grants, and loans to ensure Government spending is transparent and Government employees are accountable to the American public," Section 1 of Executive Order 14222 stated.
Article 1 Section 8 of the U.S. Constitution, also known as the Spending Clause, empowers Congress with the power to collect revenue and to appropriate money for federal expenditures.
The section does not include any executive branch position, office, department, or agency in the spending approval process