ALBANY, N.Y. (NEXSTAR) — New York and a coalition of 23 states won a lawsuit on Friday blocking the Trump administration from cutting billions in federal grants over ideological priorities. U.S. District Judge Indira Talwani ruled that the federal government doesn’t have the power to cancel state funding just by rewriting regulations.
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“This administration has spent the past year and a half trying to slash vital funding that keeps people safe, helps working families make ends meet, protects our environment, and much more,” said Attorney General James on Friday. “Today, a court upheld the rule of law and put an end to their flimsy justification for these dangerous cuts. This decision is another victory for our Constitution.”
She celebrated the decision for preventing the plaintiff states from losing a collective $5 billion-plus. Still, the federal government could appeal to the U.S. Court of Appeals for the First Circuit. But unless such an appellate court says otherwise, federal agencies have to resume the standard grant distributions for state programs.
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At the start of 2025, federal agencies and the now-defunct Department of Government Efficiency eliminated grants that the federal government had already committed to and that states had already accounted for. The feds reasoned that the programs didn’t align with President Donald Trump’s priorities.
The president’s executive orders in early 2025 and the U.S. Office of Management and Budget directed DOGE to review whether existing grants “promote efficiency and advance the policies” of the administration and eliminate any that “no longer [effectuate] the program goals or agency priorities.” James and the other plaintiff states identified those words as the “termination clause” that triggered widespread cuts and the lawsuit.
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But states understandably rely on federal grant money to balance budgets. In New York specifically, cancellations included:
Funding from the U.S. Department of Agriculture for the New York Food for New York Families program connecting local farms to food-insecure communities
Three American Rescue Plan grants (worth about $3.5 million, $11.25 million, and $9 million) through the U.S. Department of Labor to modernize the state’s unemployment system
$1 million for the State University of New York at Albany to study gender equality in STEM
$1.2 million for the City University of New York to pay STEM teachers
A share of a multi-state $248.9 million Climate Pollution Reduction grant from the U.S. Environmental Protection Agency
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Talwani decided that OMB’s termination clause can’t overrule Congress. The executive branch—the White House, which controls OMB—doesn’t have the power to withhold funds that the legislative branch already appropriated just because the office of the president changed hands, changed that agency’s mission. The judge found that the Trump administration undermined the requirement that agencies publicly disclose funding goals upfront.
Under Article I of the Constitution, Congress has exclusive authority to allocate federal money. That’s what they mean when they say, “Congress holds the power of the purse.”
Judge: Trump Admin Can’t Cut Millions In Grants To New York
