N.J. among states suing Trump admin for slashing billions of already awarded funding

Five words.

That’s the basis on which 20 Democratic attorneys general, including New Jersey’s Matt Platkin, and one state governor, are contesting sweeping cuts to federal grants and aid in a new lawsuit against the Trump administration.

The 80-page complaint filed in U.S. District Court in Massachusetts on Tuesday centers on how the Trump administration has interpreted a five-word section of federal regulations to rationalize a “nationwide slash-and-burn campaign,” abruptly terminating billions in already awarded funding to state and local governments, research institutions, universities and more.

The full, 2020 rule promoted by the U.S. Office of Management and Budget states that federal agencies can cut off grants “pursuant to the terms and conditions of the Federal award, including, to the extent authorized by law, if an award no longer effectuates the program goals or agency priorities.” OMB made clear that federal agencies can only terminate grants when there is evidence that the money is not achieving its intended goals or that there is cause to “significantly question” feasibility of achieving the goal.

But Trump’s administration in a Feb. 26 executive order selectively picked five words from the regulation “no longer effectuates…agency priorities” — to justify abrupt cuts to federal aid.

“In effectuating this directive, Agency Defendants now assert—for the first time— that the Clause means something completely new: That the Clause permits agencies to terminate grant awards when the agency simply changes its mind,” the lawsuit states.

Since the initial order authorizing the Department of Government Efficiency to get involved in federal agency grant distributions, the same phrase has featured prominently in subsequent orders, agency memos and explanations for slashing billions of dollars in aid to a wide host of recipients across the country.

“The Trump Administration and DOGE have mounted an unprecedented campaign to terminate billions of dollars of federal funding to states that supports critical programs for our residents. That reckless slash-and-burn campaign has rested on the flimsiest of legal justifications. And it has continued unabated for months — which is why we’re taking the fight to the Trump Administration to stop these reckless and illegal cuts from continuing,” Platkin said in a statement.

The complaint, which names a dozen federal agency heads as defendants, offers a litany of examples of the consequences of abrupt cuts to already awarded federal grants and aid: losing habitat restoration in Maine, ending efforts to combat hate crimes in New Jersey, ceasing shelter programs for migrants in Illinois released from overcrowded federal detention centers and cutting off research of air quality risks from wildfire smoke in rural Nevada.

“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,” the lawsuit states.

Even federal aid still flowing remains at risk, compromising safety and support to people who qualify for food assistance programs and those who live in flood zones, farmers, minority students, scientists, and more, the lawsuit states.

Arguing that the federal administration’s actions violate the Administrative Procuredures Act, the AGs have asked a federal judge to permanently clarify that federal regulations do not grant federal agencies “unfettered power” to terminate funding already awarded. Or, as an alternative, they have asked a judge to toss the Trump administration’s interpretation of the clause in question. The request, if granted, would apply to all existing and future federal grants.

Natalie Baldassarre, a spokesperson for the U.S. Department of Justice, which is representing the federal agencies, declined to comment on the lawsuit in an email Tuesday.