Wisconsin and 13 States Sue Trump Administration Over Funding

Wisconsin and 13 other states filed a lawsuit in the federal Court of Claims against the Trump administration after the U.S. Department of Labor canceled $45 million in federal grants. The funds, originally awarded under the 2021 American Rescue Plan Act, were terminated in May 2025 because the Labor Department claimed the investments no longer effectuate agency priorities.

Tony Evers, the Governor of Wisconsin, is a lead plaintiff alongside the Government of Maryland. The lawsuit alleges that the unilateral terminations breached the express terms of the grant agreements and violated the covenant of good faith and fair dealing. Evers argued that the decision to obstruct millions of dollars defies logic, noting that Wisconsin alone lost $29 million intended to streamline services and prevent fraud.

State officials report the funding cuts have caused immediate operational damage. Amy Pechacek, Secretary-designate of the Wisconsin Department of Workforce Development, stated the termination forced the state to cancel a vendor contract before the final product could be delivered. Evers highlighted that Wisconsin's unemployment insurance program had passed nine audits over three years with zero identified instances of previously undiscovered fraud, contradicting the administration's shift in priorities.