States and NGOs Sue Trump Administration Over $810 Million Funding Withdrawal

The Trump administration recently employed a “pocket rescission” to withdraw about $810 million in federal funding just before the fiscal year ended, a maneuver it says is permissible if a rescission request is sent to Congress within 45 days of year-end. This action has sparked a series of federal lawsuits. A group of states—California, Maine, Maryland, Michigan, New Mexico, Nevada and Oregon—brought a case in the Northern District of California, asserting that the rescission violates the 1974 Impoundment Control Act and exceeds constitutional separation of powers.

The HEP-CAMP Association, representing recipients of a federal education grant, filed a suit in Washington, D.C., contending that the administration illegally singled out $24.9 million for the High School Equivalency and College Assistance Migrant Programs despite congressional appropriation. Housing advocates, including the National Urban League and local nonprofits, sued over the cancellation of $56 million in housing counseling grants, prompting a judge to halt the deadline and request the administration’s response by next week. The lawsuits collectively challenge the administration’s claim of unilateral rescission authority and could reshape how presidential spending powers are exercised.