Democratic AGs Give Chilly Reception to Federal Funding Freeze

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  • A coalition of 23 Democratic AGs, led by New York AG Letitia James, filed a lawsuit in the U.S. District Court for the District of Rhode Island to block a directive from the Trump administration’s Office of Management and Budget (OMB) that would withhold trillions of dollars in federal funding to states.
  • The lawsuit sought declaratory and injunctive relief, as well as vacatur of the OMB directive, which ordered all federal agencies to indefinitely pause most federal assistance funding and loans to states and other entities. The AGs argued that the directive is unconstitutional, violates the Administrative Procedure Act, creates chaos for millions of Americans reliant on state-funded programs, endangers public safety by depriving law enforcement of critical resources, and disrupts disaster relief efforts in states like California and North Carolina.
  • Before the AGs’ request could be heard, another federal district court judge issued an administrative stay of the OMB directive in response to a separate challenge by nonprofit organizations that receive federal funding.
  • The OMB later rescinded its memo freezing federal spending.
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