A liberal federal judge ruled Friday that the Trump administration cannot cancel previously awarded grants solely because they conflict with policy priorities adopted after the funding was approved.
U.S. District Judge Indira Talwani, appointed by Barack Obama, rejected the administration’s request to dismiss a lawsuit brought by 20 states, three governors and the District of Columbia challenging the termination of billions of dollars in federal grants awarded before President Donald Trump returned to office.
I’m sorry, this is just preposterous. You have got to be kidding me. The administration isn’t offering just one plausible interpretation among many and coming up short. They’re offering the only plain English interpretation of the clause, and the judge is fabricating new rules of… https://t.co/47aAAzX3E2 pic.twitter.com/AxJdD2bWdH
— Payton Alexander (@AlexanderPayton) July 17, 2026
Talwani found that existing federal regulations prohibit agencies from retroactively canceling grants based on policy objectives developed after the awards were issued.
“Terminations of awards based on new program goals or agency priorities that an agency identifies after granting the award” are not permitted under current law, the ruling stated.
The decision marks a setback for the administration’s effort to redirect federal spending toward its own priorities and away from programs approved under the previous administration, according to Politico. Federal agencies have sought to terminate a number of grants they contend are inconsistent with the president’s agenda, prompting legal challenges from states and grant recipients.
The ruling does not decide the underlying lawsuit, but it allows the case to proceed and could restrict the administration’s ability to quickly withdraw funding that has already been awarded.
The decision comes as lawmakers in both parties are pressing the White House to reconsider a proposed overhaul of the federal grant process. Critics say the changes would give political appointees greater authority over which grants receive final approval, but overall, it’s just another example of liberal judges thinking Donald Trump doesn’t deserve all the powers of the presidency and showing that they’ll do everything in their power to stop him.
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