In a court ruling that won’t get splashed across cable news or generate front-page headlines but is vital to limiting Trump’s power, a federal judge rejected the Trump administration’s claim that the Executive Branch has the power to cancel congressionally appropriated grants.
A coalition of 20 states New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont, and Wisconsin, three governors, Josh Shapiro of Pennsylvania, Governor Laura Kelly of Kansas, and Governor Andy Beshear of Kentucky, and the District of Columbia sued the Office of Management and Budget after they unilaterally canceled federal grants to the states.
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This case concerned the Spending Clause, more commonly known as the congressional power of the purse, and the Termination Clause, which allows the Executive Branch to cancel federal grants if recipients have not complied with the grant’s conditions.
The Trump administration claimed that the Termination Clause gave it the power to override the Spending Clause and cancel congressionally appropriated grants.
The administration has been using this interpretation to cancel grants involving everything from medical research to social programs to women’s health care.
A coalition of Democratic states sued the administration, and U.S. District Judge Indira Talwan ruled:
Plaintiffs’ argument carries more force. Both the first clause of 2 C.F.R. § 200.340(a) and the Termination Clause impose conditions on grants. Under the first clause, the Federal agency or pass-through entity may terminate the grant “if the recipient or subrecipient fails to comply with the terms and conditions of the Federal award[,]” 2 C.F.R. § 200.340(a)(1), and under the Termination clause, the Federal agency or pass-through entity may terminate the grant if it “no longer effectuates the program goals or agency priorities[,]” 2 C.F.R. § 200.340(a)(4).
If the terms and conditions of the Federal award, and the program goals and agency priorities are known at the time the grant is awarded are known to the State, the State can make an informed choice to accept the grant, as required by Pennhurst. But if the regulation is construed to allow the program goals and agency priorities the grant is being measured against to change, the required notice is lacking.
The Trump administration has canceled grants to states and continues to threaten to cancel grants, but this ruling states that the administration can’t change the terms of the grants after they have been issued.
Importantly, Trump can’t cancel grants because he wants to.