Judge Blocks Trump Administration From Cutting Billions in State Grants

U.S. District Judge Indira Talwani ruled on July 17 that the Donald Trump administration cannot utilize a U.S. Office of Management and Budget regulation to terminate billions of dollars in federal grants simply because they no longer align with presidential priorities. The ruling granted a summary judgment in favor of a lawsuit filed by 23 Democratic-led states and the District of Columbia.

The states alleged the administration used a 2020 regulatory provision, revised in 2024, to execute a nationwide campaign targeting grants for food security, crime prevention, scientific research, diversity, equity and inclusion initiatives, and school lunch funding. Judge Talwani determined that the government's interpretation of the Termination Clause lacked textual support and violated the Spending Clause of the U.S. Constitution, which requires that conditions for spending be imposed unambiguously before grants are awarded.

The decision protects approximately 1,100 active grants valued at over $5 billion. New Jersey Attorney General Jennifer Davenport praised the ruling, stating it confirms the administration defied the law in its efforts to gut critical funding. The United States Government had previously sought to dismiss the case, arguing that the lawsuit was extraordinarily unusual and suffered from jurisdiction and justiciability defects.