President Donald Trump has been hit with another lawsuit from a coalition of attorneys general led by New York Attorney General Letitia James.
This suit alleges that the president is using a single clause in regulations of the Office of Management and Budget (OMB), the office run by Project 2025 author Russ Vought, to slash budgets for government agencies.
The clause states that the government can remove funding if it “no longer effectuates the program goals or agency priorities.” However, James says the funding is going to programs that “combat violent crime, educate students with special needs, protect clean drinking water, repair crumbling infrastructure, and more.”
James posted about the lawsuit to X (formerly Twitter), writing: “The Trump administration has used a single sentence buried in federal regulations to cut billions of dollars in critical funding – slashing everything from education to health care.”
Newsweek reached out to the Office of Management and Budget via email for comment.
Why It Matters
This is one of several lawsuits against the Trump administration by attorneys general, and one of several lawsuits against Trump’s attempts to defund government agencies.
According to the attorneys general, cutting funding for these programs is already having “devastating consequences” for natural disaster preparedness, medical research, and clean drinking water.
What To Know
L: Russ Vought during a television interview at the White House on October 21, 2019. R: New York Attorney General Letitia James speaks during a news conference in Manhattan on February 14, 2025.
Left: Alex Brandon, File, Right: Yuki Iwamura, File/AP Photo
The suit is against OMB, the Department of Agriculture, the Department of Defense, and several other Trump administration departments.
It is brought by attorneys general from New York, Massachusetts, New Jersey, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Wisconsin, and the District of Columbia, along with the state of Pennsylvania.
It alleges that “The Trump Administration has mounted an unprecedented and unlawful campaign to terminate billions of dollars in critical federal funding appropriated by Congress.”
This includes attempts to terminate employees through Elon Musk‘s Department of Government Efficiency (DOGE), many of which have been reversed by the courts or are currently undergoing court proceedings, as well as the use of a single OMB clause to withdraw funding from agencies.
Similarly to cases involving DOGE firings, the attorneys general are claiming that the executive branch is unlawfully removing funding appropriated by Congress, as the agencies being defunded do not meet the criteria of no longer effectuating program goals.
According to the suit, prior uses of the clause by OMB have been very limited. Agencies should use the clause to terminate grants only after finding “additional evidence” to support cutting specific funds that are “ineffective at achieving program goals,” not wide cuts to general spending, the suit said.
Additionally, OMB has previously stated that agencies “are not able to terminate grants arbitrarily,” per the suit.
The lawsuit claims that OMB and the other agencies being sued have been cutting funds arbitrarily and without examination, stating: “The results have been devastating.”
“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.”
A rally in support of National Institute for Occupational Safety and Health employees in Morgantown, West Virginia, on April 23, 2025, who received reduction-in-force notices amid the Department of Health and Human Services’ plan to fire 10,000 federal workers.
Gene J. Puskar/AP Photo
What People Are Saying
New York Attorney General Letitia James, in a press release: “From slashing money for law enforcement to cutting grants that provide resources for vulnerable students, this administration’s reckless funding cuts have put communities throughout our country at risk. On top of causing dangerous chaos and confusion, these cuts are simply illegal. Congress has the power of the purse, and the president cannot cut billions of dollars of essential resources simply because he doesn’t like the programs being funded.”
Massachusetts Attorney General Andrea Campbell, in a press release: “We cannot stand idly by while this President continues to launch unprecedented, unlawful attacks on Massachusetts’ residents, institutions, and economy. Congress controls the power of the purse and appropriates funds to ensure states have adequate resources to protect our residents’ safety and health while growing our economies. Today’s lawsuit seeks broad and forward-looking relief to stop this administration’s reckless and unlawful funding cuts.”
What Happens Next
The attorneys general have asked the Trump administration to cease pulling grants using this clause. Should the case proceed through the court system, it could reshape the power of the OMB.
