A Judge Blocked the White House From Withholding Billions in Grants to States

A federal judge has cut off one of the administration’s central tools for canceling already-awarded grants, ruling that agencies cannot pull funding simply because the White House’s priorities shifted after the money was approved.

What You Should Know

U.S. District Judge Indira Talwani of the District of Massachusetts ruled that an Office of Management and Budget clause allowing agencies to terminate a grant that “no longer effectuates the program goals or agency priorities” cannot be used to cancel awards based on new administration goals, according to Higher Ed Dive and Inside Higher Ed. The clause may still allow termination if a grantee fails to meet the priorities in place when the grant was awarded, Talwani found.

The case was brought by a coalition of state attorneys general and three governors, led by New Jersey, Massachusetts and New York. The Minnesota attorney general’s office described the coalition as 24 states and jurisdictions.

The System Under Pressure

Talwani wrote that federal regulations and the Constitution’s spending clause bar the administration from using the clause this way, according to Higher Ed Dive. Requirements “prioritize ensuring that grantees are on notice, before applying, as to what the program goals and agency priorities are for any particular award,” she wrote, per Inside Higher Ed.

Plaintiffs told the court they hold at least 1,180 active grants worth more than $5.39 billion that could be at risk, according to the ruling as cited by Inside Higher Ed.

The Receipts

“The President and his allies cannot hold critical programs hostage to their personal whims and political ideologies,” New Jersey Attorney General Jennifer Davenport said in a statement cited by Higher Ed Dive. Minnesota Attorney General Keith Ellison said it “was absurd” to pretend “five words buried in an obscure federal regulation overrode the Constitution.” The OMB did not respond to a request for comment, Higher Ed Dive reported.

What Happens Next

The ruling does not restore grants already terminated; those disputes must go to the Court of Federal Claims, according to Inside Higher Ed. OMB has also proposed rewriting its grant-termination language to allow cancellations based on priorities “as they exist at the time of the termination,” a change that drew more than 490,000 public comments and could revive the authority if finalized.

References: Higher Ed Dive | Inside Higher Ed | Minnesota Attorney General