U.S. judge blocks Trump administration's use of termination clause to cut federal grants

U.S. District Judge Indira Talwani in Boston issued a summary‑judgment ruling that the Trump administration cannot invoke an Office of Management and Budget termination clause to cancel billions of dollars in federally‑awarded grants. The decision came after a coalition of more than twenty Democratic‑led states, including New Jersey, Massachusetts and New York, challenged the administration's interpretation that it could terminate grants whose objectives no longer aligned with agency priorities.

Judge Talwani found that the “Termination Clause” does not independently authorize agencies to revoke awards after they have been granted and that the administration’s use of the rule violated the Constitution’s Spending Clause. The ruling preserves funding for programs covering public safety, disaster preparedness, scientific research, clean drinking water, public health, education and food security. New Jersey Attorney General Jennifer Davenport called the verdict “an important win for all New Jerseyans,” emphasizing that the administration had illegally gutted critical federal funding.

The case underscores limits on executive power to reshuffle appropriated funds and safeguards billions of dollars of state‑level grant support.