Lawsuit challenges billions of dollars in Trump administration funding cuts

By | June 25, 2025
Attorneys general challenge Trump administration grant funding cuts in court

Over 20 Democratic-led states, along with Washington D.C., have filed a lawsuit against the Trump administration. They claim it illegally cut billions in federal grants to punish states with opposing policies. The lawsuit, filed in a Boston federal court, could reshape how future administrations manage grant programs.

States Say Cuts Violate the Constitution

At the center of the legal fight is the “agency priorities clause.” This clause lets federal agencies end grants that no longer align with their goals. Until recently, officials rarely used it. Now, states argue the Trump administration has abused the rule to cancel vital programs.

According to the lawsuit, these cancellations undermine Congress’s authority. States claim the executive branch cannot simply erase funding approved by lawmakers.

Massachusetts Attorney General Andrea Campbell said, “These are not budget corrections. They’re political attacks disguised as policy changes.”

Billions in Grant Money Canceled

Since early 2025, the administration has canceled thousands of grants. These included funding for health care, education, and environmental programs. For example:

  • An $11 million agriculture grant in Massachusetts disappeared.
  • A mental health program for at-risk youth in New York lost support.
  • An asthma prevention project in Washington D.C. was shut down.

Critics say the administration targeted programs tied to climate change, diversity, or sanctuary city policies. Many believe the goal was to silence opposition through budget cuts.

Legal Grounds for the Lawsuit

The lawsuit claims the administration violated the Constitution’s separation of powers. Congress controls federal spending—not the president. The states argue that the funding cuts bypass this rule.

Connecticut Attorney General William Tong added, “You can’t change the rules halfway through a game. These grants were already awarded and active.”

States also argue the administration failed to show that the grants stopped meeting their goals. Instead, they say agencies used political preferences to justify the cuts.

Real-World Consequences

Many communities now face setbacks. In Oregon, a tribal climate program shut down. In New Jersey, schools lost funds for healthy meal programs. These changes have left local officials scrambling.

Oregon Attorney General Ellen Rosenblum warned, “When the federal government breaks a promise, families suffer.”

So far, over $4 billion in funding has been affected. Programs that supported underserved communities were among the hardest hit.

Early Court Wins Give Hope

This isn’t the first lawsuit over the administration’s cuts. Earlier this year, Rhode Island won a case against the Department of Housing and Urban Development. A judge ruled that the agency could not retroactively cancel approved grants. That decision reinstated $20 million in housing funds.

Experts say that ruling could help states win the current case. Professor Erica Holt from Columbia University noted, “This lawsuit could set limits on executive power in future administrations.”

Trump Officials Defend the Cuts

The administration stands by its decision. Officials say the canceled programs no longer match their goals. A spokesperson for the Office of Management and Budget said, “We must ensure federal funds support national security and economic priorities.”

Yet critics remain skeptical. Many believe the cuts focus more on politics than performance.

Programs supporting climate research, LGBTQ+ rights, or immigrant communities appear to be frequent targets. These patterns, say legal experts, reveal political bias.

Federal Funding Stability in Question

This lawsuit raises a critical question: Can future administrations cancel approved funding at will?

If courts side with the Trump administration, states could face greater uncertainty. Long-term planning would become harder. Nonprofits, schools, and cities might hesitate to rely on federal support.

New York Attorney General Letitia James summed it up: “If we can’t trust awarded grants, we can’t plan for tomorrow.”

What’s Next?

The federal court in Boston will review the case in the coming weeks. Given the stakes, appeals are likely. Some legal analysts expect the case to reach the U.S. Supreme Court.

For now, communities wait. Many wonder whether the funding they counted on will ever return.