Democrats sue White House budget office over federal grant freeze

A coalition of Democratic state attorneys general announced legal action against the White House budget office Tuesday over its directive to freeze federal assistance while reviewing whether government spending aligns with President Trump’s agenda.  

New York Attorney General Letitia James (D) said on a press call that the policy is “reckless, dangerous, illegal and unconstitutional.” 

“The president does not get to decide which laws to enforce and for whom,” James said. 

Led by James’s office, Washington, D.C., and 21 other Democratic state attorneys general joined the lawsuit, which was filed later in the day in Rhode Island’s federal district court.

James said the states will seek a court order to “immediately” stop the enforcement of the policy. It is already temporarily on hold, however, after a separate group of private plaintiffs sued.

Late Monday, the Office of Management and Budget (OMB) issued a memo directing federal agencies to temporarily pause “all activities related to obligation or disbursement of all Federal financial assistance.” 

Matthew Vaeth, OMB’s acting director, said in the memo that the temporary pause will provide Trump’s administration with time to determine the “best uses of the funding” for agency programs that are consistent with the law and Trump’s “priorities.” 

The pause was set to go into effect at 5 p.m. Tuesday, according to the memo, which was reviewed by The Hill. OMB may grant exceptions for certain awards on a case-by-case basis, the memo states. 

“We’re not talking about nibbling at the edges of the President’s authority; we’re talking about ignoring the entirety of the United States Constitution, throwing duly enacted statutes out the window simply because the president of this country doesn’t like it,” said Rhode Island Attorney General Peter Neronha. “That’s not permissible under our legal system. Presidents have powers, but they are not unlimited.” 

White House press secretary Karoline Leavitt said during Tuesday’s press briefing that the memo will not impact Social Security, Medicare, food stamps, welfare and other assistance to individuals. She defended the freeze and said Trump’s executive orders aimed at overhauling the federal workforce last week served as notice. 

But James said that, despite attempts to clarify the “scope and meaning” of the memo, some states have already reported frozen funds. 

Several Democratic lawmakers took to social media Tuesday to raise alarm about the policy. 

Sen. Ron Wyden (D-Ore.) said on the social platform X that his staff confirmed reports that Medicaid portals are down in all 50 states following the directive, while Sen. Mark Warner (D-Va.) said his office received notice from a domestic violence shelter that it might have to close its doors if the order goes into effect. James also said at least 20 states were frozen out of their Medicaid reimbursement systems.  

California Attorney General Rob Bonta (D) said his state believes Federal Emergency Management Agency (FEMA) funding for the wildfires that have ravaged the Los Angeles area could be at risk.  

The attorneys general agreed Tuesday that the order violates the separation of powers between Congress — which holds the power of the purse — and the executive branch. 

“OMB is jumping so far out of their swim lane that, frankly, they are out of the pool,” Bonta said. 

Trump’s aid freeze is temporarily on hold after a group of nonprofits separately filed a lawsuit. A federal judge agreed to issue a “brief administrative stay” preserving disbursements through Monday, when she will hold another hearing.

“OMB’s Memo violates the Administrative Procedure Act because it is in excess of OMB’s statutory authority, is arbitrary and capricious, and violates the First Amendment,” Jessica Anne Morton, a lawyer with watchdog Democracy Forward who represents the nonprofits, wrote in court filings. “Plaintiffs will suffer imminent injury should it be permitted to take effect. 

Updated at 6:12 p.m. EST