A federal judge in Boston has ruled that the Trump administration cannot terminate billions of dollars in already-approved grants simply because the projects no longer fit with the president’s policy agenda.
U.S. District Judge Indira Talwani sided with 23 Democratic-led states and the District of Columbia, which challenged the administration’s use of a regulation issued by the Office of Management and Budget to withdraw grant funding after awards had already been made.
The administration had relied on a provision allowing agencies to end grants when they no longer advanced “program goals or agency priorities.” Since President Donald Trump returned to office, federal agencies have invoked the clause to target funding linked to initiatives including diversity, equity and inclusion and climate preparedness.
Talwani rejected the administration’s interpretation of the rule, saying it did not authorize agencies to cancel grants based on goals or priorities identified only after the funding had been awarded.
The judge also found that imposing such new spending conditions after the fact could violate the U.S. Constitution. According to the ruling, the regulation requires grant recipients to be informed of relevant goals and priorities before grants are awarded, rather than allowing agencies to rewrite the terms later.
The lawsuit was brought by states led by Massachusetts, New York and New Jersey. The challengers argued that the administration had stretched the regulation far beyond how it had previously been understood.
They said federal agencies had already pulled billions of dollars from programs supporting universities, crime-prevention efforts and school meal initiatives. More than 1,100 active grants, collectively worth over $5 billion, were still considered vulnerable to cancellation.
The ruling marks a significant setback for the administration’s effort to reshape federal spending by withdrawing previously approved funding from programs that no longer match its policy direction.
