THERE WAS NOTHING subtle about the Trump administration’s approach to government spending when Elon Musk waved a chainsaw in front of a crowd of cheering activists at a February gathering of the Conservative Political Action Conference in Washington. The clear message from the face of the new Department of Government Efficiency: This is no delicate pruning exercise but one in which we’re felling entire trees.
The sweeping powers of the presidency give the administration plenty of running room to upend the status quo, but it can’t do that by simply reinterpreting federal laws and regulations. That’s the argument at the heart of a series of lawsuits challenging sweeping cuts to federal grants.
Hundreds of organizations across the country were notified in recent weeks that federal grants they operated – funding everything from anti-violence programs to initiatives to ensure clean drinking water – were being terminated immediately.
The government authority to abruptly cancel millions of dollars in funding relied on the same boilerplate wording delivered to each grant recipient, usually in a short email: The award “no longer effectuates the program goals or agency priorities.”
A coalition of state attorneys general that includes Massachusetts Attorney General Andrea Campbell filed suit on June 24 against an array of federal offices over the administration’s use of that nine-word phrase. The “nationwide slash-and-burn campaign” rests on a fundamental misinterpretation of a short subclause “buried in federal regulations” put out by the Office of Management of Budget, the attorneys general argue.
While this clause says that agencies can indeed terminate grants if they no longer “effectuate program goals or agency priorities,” the AGs argue that the Trump administration is fundamentally misinterpreting the meaning of this language.
The clause does not mean that when an administration changes its priorities that organizations abiding by the terms of their grants are suddenly subjected to having the grants yanked, the complaint argues. Instead, according to the lawsuit, the wording means the grant is subject to termination if it’s determined that the recipient is not meeting the goals set out for the grant program at its inception.
The regulatory language governing grants was put in place by OMB in 2020, but the suit claims the federal office “never once indicated that the words ‘agency priorities’ would confer broad authority on federal agencies to terminate grants based on new or changed agency priorities.”
Rather, the suit says, the office focused on establishing program goals at the time that the grant award was made public. In other words, to ensure the continuity of their funding, grant recipients have to do what the grant said they would do.
Yet, in recent months, programs that have been using money in the way Congress intended in authorizing the spending suddenly saw the rug pulled out from under them.
“The results have been devastating,” the coalition of mostly blue state attorneys general wrote in their complaint filed this week. “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. Federal agencies have done all of this without any advance notice, without any explanation to the state recipients, and in direct contravention of the will of Congress.”
Massachusetts housing groups, the state Department of Agricultural Resources, forestry services, public health programs, and violence prevention organizations are just some of the groups left reeling from abrupt cuts.
In a separate suit filed in March, before the recent complaint from state AGs, organizations that fight against discrimination in housing organizations sued to “quite literally keep the lights on.” A US District Court judge in Massachusetts granted a temporary restraining order reinstating 78 Fair Housing Initiatives Program grants.
These cuts came “arbitrarily and without notice, reason, or sensible explanation,” the housing organizations argued, and suddenly losing the funding would cause immediate and irreparable harm.
The axe also fell on violence prevention organizations like Chelsea-based Roca, which saw a $6 million grant terminated for not being aligned with the agency priorities. Health Resources in Action, a Boston-based non-profit public health equity organization and one of the five named plaintiffs in a national class action suit, is among a group of community organizations suing the Trump administration for slashing Department of Justice grants because of changed priorities.
In the suit, which received a hearing in federal court in Washington, DC, on Thursday, the community organization coalition argues that the use of the boilerplate language when the Office of Justice Programs ended more than 370 multi-year agreements and grants was unconstitutionally vague, exceeded the office’s authority, and did not comply with the Administrative Procedure Act.
The group argues that the idea that the agency has broad discretion to terminate a grant already awarded because of a post-hoc change in agency position is a novel and unacceptable understanding of the grant termination provision.
It also argues that the cuts are a constitutional violation, bypassing Congress’s appropriations authority and ignoring separation of powers.
The DOJ is asking to dismiss the suit. The groups, it said, accuse the administration of “blindly terminating various grant agreements ‘en masse’ so that it can avoid spending congressionally appropriated funds,” adding, “These accusations are unfounded and wrong.”
In the Trump administration’s view, the DOJ reviewed several thousand “competitive, discretionary grants” to assess whether those grants aligned with current agency priorities, deciding to terminate 376 grant agreements. It intends to reallocate those funds to “new projects that more directly advance agency priorities.”
Along with asking that funds be reinstated, the community groups want an injunction and declaration that the DOJ’s interpretation of the right to terminate a grant based on its alignment with agency priorities is incorrect.
In the suit filed this week, the attorneys general do not ask to stop any particular grant cut, but rather seek a legal declaration on the meaning of the OMB “priorities” clause. According to the court docket, the government has not yet submitted a response.
The Department of Justice is one of the named defendants and is representing the heads of OMB, the Department of Agriculture, the Department of Commerce, the Department of Homeland Security, the Department of Defense, the Department of State, the Environmental Protection Agency, the Federal Emergency Management Agency, the National Endowment for the Humanities, and he National Science Foundation. A DOJ spokesperson declined to comment in an email on Thursday.
The states and programs in question receive billions of dollars in federal funding each year, the lawsuit asserts. Beyond the funds that the administration has already attempted to cut off, there are ongoing grant programs to which the organizations are planning to apply.
These attorneys general and the impacted organizations are worried not just about the impacts of the funds already stopped mid-stream, but also the fate of future grant awards.
Indeed, a national fair housing group filed suit on the same day, arguing that “HUD is flouting its obligation to administer a fair housing grant program established and funded by Congress.” The agency is refusing to spend appropriated funds, the lawsuit argues, cutting off its usual grant awards schedule midstream.
HUD has not awarded any new grants or asked Congress to revoke already approved funds for these new grants, and because any funds that are not assigned by September will expire, the agency’s inaction “risks the complete loss of the appropriated funds.”
Each of the groups and states bringing the array of lawsuits argue that the damage goes beyond even the significant funding loss, and that they are already feeling the urgency.
Attorney Lisa Newman, representing the violence prevention coalition, told US District Court Judge Amit Mehta on Thursday that the erosion of trust and damage to reputation to these on-the-ground violence prevention groups, built up over decades, “cannot be overstated.” The groups have made promises to community members who will assume that the organizations are backing away from their obligations, she said.
