Attorney General Raoul joins lawsuit challenging Trump’s termination of federal grants

Each of those actions, the lawsuit argues, were based on a misuse of a single clause in one regulation under the federal Office of Management and Budget. That clause allows agencies to terminate a grant if the agency determines the award “no longer effectuates the program goals or agency priorities.”

“The Trump Administration has claimed that five words in this Clause — ‘no longer effectuates . . . agency priorities’ — provide federal agencies with virtually unfettered authority to withhold federal funding any time they no longer wish to support the programs for which Congress has appropriated funding,” the lawsuit alleges.

The suit is one of more than a dozen Raoul has joined as part of a coalition of Democratic attorneys general who have been battling the administration since Trump’s second inauguration in January.

Speaking Monday to a congressional panel made up of Democratic members of the U.S. House and Senate judiciary committees, Raoul joined three other members of that coalition to explain their litigation campaign.

“Whether or not I disagree with President Trump on his policy agenda, he must act in a lawful way that is consistent with the Constitution and the laws that Congress has enacted,” Raoul said. “Unfortunately, the president and his administration have chosen, with many of their actions, to ignore the Constitution and federal law. And when constitutional guarantees are ignored, all Americans are at risk.”

Grants affected by cuts

The lawsuit challenges three specific funding cuts that have directly affected the state of Illinois. Those include:

• The U.S. Department of Agriculture’s decision in March to halt reimbursements under the Local Food Purchase Assistance Program, which provided funding for nonprofit organizations to buy locally grown food products from farmers for free distribution to vulnerable communities.
• A decision by the Federal Emergency Management Agency to terminate two Shelter and Services Program Grant awards to the Illinois Department of Human Services totaling $29 million. The money was intended to reimburse Illinois for the cost of providing food, shelter and medical care to migrants whom the U.S. Department of Homeland Security had released to relieve overcrowding at federal detention facilities.
• And a decision in May by the U.S. Department of Labor to terminate grants totaling $28.8 million to the Illinois Department of Employment Security for modernization of the state’s unemployment insurance system.

According to the lawsuit, OMB first adopted the regulation in 2020, near the end of the first Trump administration. At the time, according to the Federal Register, the agency said the clause was intended to allow agencies to end a grant program under specific conditions, but that it was not intended to let them terminate grants “arbitrarily.”

The clause was later updated to include its current wording in 2024, near the end of Joe Biden’s administration. However, according to the complaint, “OMB never suggested, in either the 2020 or 2024 rulemaking, that a grant could be terminated even though the grant was continuing to serve the very goals for which the monies had initially been awarded, merely because the agency’s priorities shifted midway during the use of the grant—let alone with no advance notice.”

As of Wednesday, the case had not yet been scheduled for a hearing.