Oregon Sues Trump Administration for Quietly Slashing Billions in Promised Federal Grants
A coalition of 21 attorneys general, including Oregon Attorney General Dan Rayfield, is suing the Trump Administration over its indiscriminate, unprecedented, and unlawful attempts to invoke a single provision in the federal regulations to erode billions of dollars in critical federal funding for states and other grantees.
Oregon Joins Lawsuit To Limit Trump Administration’s Use Of Federal Regulations To Eradicate Funding
Rayfield announced yesterday that Oregon has joined the 21-state coalition seeking to limit the Trump Administration’s use of a single clause in federal regulations to terminate critical funding for combating violent crime, educating students, protecting drinking water, conducting lifesaving medical and scientific research, safeguarding public health, addressing food insecurity, and much more.
The lawsuit, filed in the District of Massachusetts, comes as Oregon cities grapple with deep budget cuts, as inflation and federal funding losses have sparked a statewide crisis.
Since January 20, at the direction of President Trump, the Department of Government Efficiency (DOGE) has stripped away thousands of grants they had previously awarded to states and grantees by invoking a single clause in the federal regulations of the Office of Management and Budget (OMB), which provides that agencies may terminate an award of federal funding if it “no longer effectuates … agency priorities.”
These five words were used by the Trump Administration in their indiscriminate campaign to unlawfully terminate critical funding expressly authorized by Congress and awarded to states. Federal agencies have not previously used the clause in this way.
Rayfield said:
“The Trump Administration can’t just decide it doesn’t like Congress’s priorities and pull the plug. Oregonians deserve stability, accountability, and a federal government that keeps its promises.”
The coalition members argue that the Trump Administration’s decision to invoke the regulation to terminate grants based on its changed agency priorities is unlawful, as the regulation does not authorize federal agencies to terminate grants based on changes in agency preferences after a grant is awarded.
The coalition is seeking a declaratory judgment that neither the OMB regulation nor the Administration’s regulations authorize termination of funding based on agency priorities identified after the grant was awarded.
They also request clarity from the court regarding the scope of this regulation, as hundreds of billions of dollars collected by states annually are at risk of termination due to this regulation.