New York Attorney General Letitia James has announced an imminent lawsuit against the Trump administration, challenging the legality of its decision to freeze federal grant programs.
James, joined by other Democratic attorneys general, contends that the sweeping funding halt is both unconstitutional and harmful to communities that rely on these critical resources.
Federal Grant Freeze and Legal Implications
On Monday, January 8, 2025, the White House Office of Management and Budget (OMB) issued a directive temporarily freezing all federal grants and loans, with the exception of Social Security, Medicare, welfare, and direct individual assistance programs. The measure, effective Tuesday at 5 p.m. ET, has been widely criticized for its potential impact on federally funded programs across the country.
James denounced the move on X (formerly Twitter), stating:
“This administration’s pause on federal funding is reckless and dangerous. Programs in communities across the entire nation depend on this funding to support our families, and this action is only going to hurt them.”
During a press conference on Tuesday, James confirmed that her office is preparing litigation to block the funding halt:
“Not only does this Administration’s new policy put people at risk, but it is plainly unconstitutional.”
Legal experts suggest that the lawsuit will likely argue that the executive branch lacks unilateral authority to suspend appropriated federal funds without congressional approval, a potential violation of the Appropriations Clause of the U.S. Constitution (Article I, Section 9, Clause 7).
Trump Administration’s Defense of the Policy
In response to growing concerns, White House Press Secretary Karoline Leavitt defended the policy during a Tuesday press briefing, asserting that the freeze is not a blanket suspension of all federal grants.
She emphasized that programs affecting direct individual assistance remain untouched and framed the move as part of the administration’s efforts to curtail discretionary spending:
“This means no more funding for illegal DEI programs; it means no more funding for the green new scam…It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies.”
While the administration asserts that no Medicaid payments have been affected, reports surfaced indicating that the Federal Payment Management System experienced outages, raising concerns about whether essential services could face disruptions in disbursement.
Bipartisan Response and Potential Legal Ramifications
The funding pause has prompted sharp bipartisan reactions, with lawmakers expressing concerns over the legal and practical ramifications of the move.
Senator John Fetterman (D-PA) flagged potential disruptions to Medicaid services, reporting that organizations in Pennsylvania have already lost access to federal funds:
“These services, including Medicaid, are critical to our most vulnerable, and I am calling on @POTUS to immediately restore access.”
Similarly, Senator Bernie Sanders (I-VT) called the freeze “a dangerous move towards authoritarianism”, warning of its negative impact on children, seniors, and low-income families.
Conversely, Charlie Kirk, CEO of Turning Point USA, dismissed concerns over the freeze, stating:
“Social Security is not affected. Medicare isn’t affected. Food stamps, pensions, and the rest are not affected. There’s only uncertainty in this room, amongst the media.”
Legal Battle Ahead
As Attorney General Letitia James prepares to file suit, legal analysts suggest that the case could test executive authority over federal appropriations.
A key question will be whether the Trump administration’s unilateral freeze violates constitutional limits on executive power or federal statutes governing budget implementation.
If successful, James’ lawsuit could force the administration to lift the funding pause, restoring financial support to impacted programs.
Given the potential nationwide consequences, legal observers anticipate that the case could reach the U.S. Supreme Court.
