Judge Talwani Blocks Trump Grant Terminations; Billions in Awards Protected

A federal judge in Boston ruled Friday that the Trump administration cannot use an obscure Office of Management and Budget clause to retroactively cancel billions of dollars in federal grants. U.S. District Judge Indira Talwani granted summary judgment for 23 states and Washington D.C., finding the administration’s interpretation of the termination clause had no legal basis. The decision protects roughly $5 billion in at-risk grants and blocks a major avenue for funding cuts to climate, diversity, and public safety programs.

What the termination clause says and how it was used

The disputed language, added to OMB regulations in 2020 and revised in 2024, allows federal agencies to terminate a grant if it “no longer effectuates the program goals or agency priorities.” Before Trump’s second term in 2025, federal agencies had never used this clause to cancel grants solely because priorities changed. Since January, the Trump administration has invoked it to cut billions in awards for diversity initiatives, climate preparedness, and public safety programs across multiple agencies.

Judge Talwani’s ruling and legal reasoning

Talwani wrote that the regulation does not permit agencies to “terminate grants based on program goals and agency priorities identified after grants were awarded.” She found the administration’s interpretation “is not clearly supported by the text of the provision, runs counter to the regulatory scheme, receives no support in the rulemaking history, and would violate the Spending Clause’s requirement that conditions be imposed unambiguously.” The judge granted summary judgment, meaning no trial is needed, and permanently barred the administration from using the clause to revoke grants based on new priorities.

What programs were threatened and what comes next

The states argued that federal agencies had already pulled billions in grant funding, with roughly 1,100 active grants worth over $5 billion still at risk if the administration’s approach had prevailed. Affected programs included crime prevention, food security, scientific research, clean water, and disaster preparedness. New Jersey Attorney General Jennifer Davenport said the ruling confirms “the Trump Administration defied the law when it embarked on its campaign to gut critical federal funding.” The White House has not yet commented on the decision.

Why this matters for federal spending and Congress

The ruling reinforces that Congress controls the power of the purse. Once Congress appropriates money for a program and an agency awards a grant, the executive branch cannot simply revoke it because a new administration has different policy priorities. The decision blocks what states called a “nationwide slash-and-burn campaign” and protects the legal principle that grant conditions must be clear before awards are made, not imposed retroactively.

Final Thoughts

Judge Talwani’s ruling is a major setback for the Trump administration’s strategy to cut federal spending through grant terminations. With $5 billion in awards now protected and the termination clause blocked, the administration will need congressional action or a different legal strategy to redirect federal funding toward its priorities.

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