President Trump is once again threatening to cut federal funding for “sanctuary jurisdictions” that fail to cooperate with his Administration’s forceful immigration policies. The latest threat came on January 13th and escalated a series of attempts — dating back to his first term — to withhold federal funds from Democrat-led states and cities on political grounds. But can he legally do so?
The impoundment arguments against the President’s withholding of funds from already-allocated grants have enjoyed relative success in the lower courts. That success, however, could now be complicated by a recent D.C. Circuit opinion and how the Supreme Court ultimately evaluates impoundment claims — the primary theory offered by litigants to block the President’s unilateral funding cuts. Notably though, some plaintiffs have begun to challenge the President’s disdain for Democratic jurisdictions on new constitutional terrain: the First and Fifth Amendments. While these budding theories are not bulletproof, they could give the targeted jurisdictions (or citizens and organizations therein) chances at relief in light of the headwinds facing general impoundment theories.
Pulling No Punches
Undeterred by questionable authority and even adverse court rulings, the Trump Administration has set its sights on defunding “blue” states and cities standing in the way of its agenda across a variety of policy areas.
Clean Energy Funding
On October 1, 2025, Office of Management and Budget (OMB) Director Russell Vought posted on X that the Trump Administration would cancel a swath of “Green New Scam funding to fuel the Left’s climate agenda” in sixteen states that voted for Kamala Harris in the 2024 election. Later that day, the terminations were effectuated to the tune of 321 awards supporting 223 projects — a cancellation of almost $7.6 billion in grants authorized by the Inflation Reduction Act in 2022. The cancellations by Energy Secretary Chris Wright, including “upgrades to electrical grids” and “efforts to reduce methane leaks,” came on the first day of the government shutdown and mostly targeted projects in Democrat-led states. Nodding to the government shutdown and his pretextual desire to get rid of Department of Energy (DOE) awards for clean energy initiatives, President Trump celebrated the strategic timing of the cuts: “I can’t believe the Radical Left Democrats gave me this unprecedented opportunity.”
Welfare and Child Assistance
Another recent tiff between the Trump Administration and blue states has occurred over the Administration’s January 6th freeze of up to $10 billion for three federal childcare and family assistance programs. Following the Administration’s claims of fraud and misuse related to these programs in California, Colorado, Illinois, Minnesota, and New York, the Department of Health and Human Services (HHS) notified the blue states that funding would no longer be distributed. HHS spokesman Andrew Nixon did not indicate whether he believed the fraud was more widespread or how the department chose these specific states. His unadorned message was that “[f]or too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch.”
Immigration Enforcement
More still, the latest pressure exerted by President Trump just over two weeks ago threatens to pull unspecified sources offederal funding from “Sanctuary Jurisdictions” — those jurisdictions (twelve blue states, the District of Columbia, and eighteen other blue cities) that the Department of Justice (DOJ) has declared uncooperative with the Administration’s immigration enforcement efforts throughout the country. The President gave these jurisdictions until February 1st to get in line, proclaiming that, after that date, “we are not making any payments to sanctuary cities or states having sanctuary cities.” The President made some version of this threat twice before in response to frustration with immigration cooperation: once through an executive order during his first Administration and once again in April 2025. Both attempts were blocked by federal judges, but neither seems to be stopping the Administration from continuing to levy its threats. Chicago mayor Brandon Johnson dubbed the ultimatum “blatantly unconstitutional and immoral,” and various Democratic mayors and governors vowed to challenge it in court yet again.
Trump Administration (II) Funding Cuts to Blue Jurisdictions on Political Grounds*
| Agency | Project(s) | Reason | Amount ($) | Status |
| DOE | Inflation Reduction Act clean energy projects | Doesn’t align with energy policy agenda | $7.56 billion | Partially blocked; ongoing litigation |
| HHS | TANF; Child Care and Development Fund; Social services grants | Claims of fraud and misuse | $10.27 billion | Temporary restraining order; ongoing litigation |
| TBD (DHS-initiated) | TBD | Local authorities not cooperating with deportation efforts | TBD | TBD |
* This figure does not include the Administration’s exclusive approval of Republican-jurisdiction requests for disaster relief funds through FEMA, since they aren’t technically “changes” or “cuts” in grants.
Legal Arguments and Status of Recent Challenges
Many of the arguments asserted by litigants and cited by judges in blocking the President’s defund-the-Democrats campaign resemble those broadly used against the President’s array of impoundment-like actions. But due to ongoing developments, those theories — rooted in Article I of the Constitution and/or reliant on the Administrative Procedure Act’s (APA) private right of action to bring claims under the Impoundment Control Act (ICA) — might be harder to plead going forward.
The Arguments on Repeat
Federal judges have thwarted the Administration’s attempts to “turn[] off the money spigot” for blue jurisdictions on several constitutional grounds in the past year. For example, City of San Francisco v. Trump squarely addressed the Trump Administration’s attempt to single out sanctuary jurisdictions for funding cuts. Pursuant to the understanding that Congress has the “power of the purse,” Judge Orrick (NDCA) cited violations of the Article I Appropriations and Spending Clauses, in addition to the more general separation of powers principle. Moreover, the Trump Administration ran into Tenth Amendment trouble. Because it put new conditions on already-appropriated federal funding, Judge Orrick applied the Tenth Amendment’s “anticommandeering” doctrine that prohibits the federal government from coercing local governments to implement national policy. The Trump Administration has appealed some of the grants for injunctive relief that inhibit its efforts.
Statutory bases for invalidating the Administration’s funding blocks have also come to bear. Under § 706 of the APA, federal grant recipients have contended that agency decisions to withhold appropriated funds are “arbitrary and capricious,” “not in accordance with law,” and ultra vires actions (beyond their statutory authority). In ongoing cases like New York v. Administrator for Children and Families, plaintiffs have brought claims under the APA because the ICA technically has no private right of action against the executive branch, whereas the APA does. Thus, litigants have creatively gotten relief by challenging ICA impoundments using the APA as the cause of action.
Troubled Waters
Despite some initial success, the strategy of private litigants making constitutional claims against presidential impoundment is a less straightforward one after the D.C. Circuit’s August 2025 opinion in Global Health Council v. Trump (challenges to USAID grant terminations). The difficulty stems from the court’s characterization of the seminal Supreme Court case Dalton v. Specter. The court read Dalton to mean that plaintiffs “lack a cause of action to bring . . . freestanding constitutional claim[s]” about President Trump’s impoundment actions. By their characterization, Dalton “rejected . . . effort[s] to recast statutory claims as constitutional ones” and likewise precludes constitutional impoundment arguments that precisely derive from statutory requirements (in the ICA and APA). It is too early to know whether that is right, but the Supreme Court at least agreed with this argument enough to grant the Trump Administration’s request for a stay of the district court’s order to cease the suspension of funds.
That holding is also quite damning because on the statutory front, the D.C. Circuit held that the ICA only authorizes the Comptroller General (and not private litigants) to bring lawsuits to enforce it, which precludes private parties from doing so. Plus, to the extent that litigants have used the APA to find a private right of action for ICA claims, the D.C. Circuit appears to have also foreclosed that workaround. The Supreme Court has not yet decided these questions either, but similar to the constitutional limitations, the Court’s stay of the district court order is initially affirming of closing off the path for private-party statutory relief too.
If that weren’t enough, the atmospheric and practical challenges of impoundment have also sharpened. The Trump Administration is actively arguing that the ICA is unconstitutional altogether. And even if it is constitutional, the Administration is acutely aware that the Act permits the President to withhold funds from recipients during a 45-legislative-day period in which Congress has to consider the request for a formal rescission. In reality, that means funds can be tied up for months on end before any relief is granted by courts. All this is to say that impoundment claims are anything but stable at the moment.
New Arguments Enter the Fray
Despite the floundering status of constitutional and statutory impoundment claims, the Administration’s unapologetic targeting of blue states has now also opened the door for political speech claims under the First Amendment and equal protection claims under the Fifth Amendment. Strands of First and Fifth Amendment arguments emerged in one recent political targeting case. These arguments are distinct from the general challenges to presidential impoundments and raise their own interesting possibilities and questions.
In City of St. Paul v. Wright, municipality and nonprofit grant recipients brought these claims in response to the 2025 termination of DOE grants for clean energy projects. On January 12th, Judge Amit Mehta (DDC) issued a court order denying the First Amendment claim but granting relief on the Fifth Amendment challenge. These constitutional arguments for blue-jurisdiction litigants could be timely as the vitality of impoundment claims hangs in the balance. But these theories come with some difficulties too.
First Amendment Viewpoint Discrimination
Under the First Amendment, the plaintiffs in Wright asserted that the grant terminations were “discrimination on the basis of political viewpoint” and “retaliation against protected speech and association.” They pointed to the Administration’s public statements to argue that the terminations intentionally targeted “DOE awardees in Blue States . . . in order to punish states and citizens for their political views.” Although there was strong evidence for this, Judge Mehta repressed evaluation of the merits because the plaintiffs ran into justiciability issues. The city and nonprofit grant recipients sought to assert a First Amendment claim on behalf of an aggregate population of “third-party” citizens and failed to meet the bar for third-party or associational standing. For one, not all citizens of blue states were retaliated against because many of them voted for Republicans. And second, the cities and organizations could not prove that their interests were identical to all of those citizens. Thus, these litigants were the wrong parties to bring claims for protected political speech.
Still, there is maybe some reason to be optimistic about the prospect of First Amendment claims. Despite Judge Mehta’s denial in Wright for failure to satisfy standing, there are other plaintiffs that plausibly could clear the threshold. Individual citizens that voted for Democrats and suffer a loss of benefits (such as TANF or Medicaid) due to sanctuary-city funding cuts may have a cognizable injury. At the least, such a population would have better arguments for the two justiciability issues that plagued the municipality and nonprofit grant recipients in Wright: (1) They would have a more unique injury; and (2) they would not be third parties, therefore sharing a common identity of interests. It is plausible that they might run into taxpayer standing issues, but a case in which the President discriminatorily targets revocation of funds could be distinguishable enough on the facts. Maybe a riskier — yet possible — strategy would also be a third-party or associational case by a local Democratic party on behalf of its constituents. After all, in in the First Amendment context, the Supreme Court has “lessen[ed]” the “prudential limitations on standing.”
Once past the threshold standing question, the merits arguments for rejecting discrimination based on political viewpoint are compelling. Importantly, challenging the Trump Administration’s discriminatory classification in deciding which funding to cut is seemingly a different posture than going after executive authority to impound under the ICA. The Trump Administration has not hidden its agenda in the multitude of contexts where it has sought to punish blue jurisdictions, leaving behind ample evidence of discriminatory intent. Of course, there is still the risk that the Administration begins to mask its true motivations behind some other (pretextual) government purposes. But it would still need to survive strict scrutiny, which is an exacting (if not fatal) standard for the government.
Fifth Amendment Equal Protection
Perhaps an even brighter spot for blue-jurisdiction litigants is that the Wright plaintiffs succeeded on their Fifth Amendment challenge. The city and nonprofit grant recipients cleared the standing hurdle because they suffered direct injuries through the loss of funds. Going on to assess the government’s classification between blue and red states under rational basis review, Judge Mehta noted that “[t]he only identifiable difference” between otherwise comparable grants that were terminated instead of retained was “the grant recipient’s state’s political identity.” Accordingly, because the Trump Administration had no “legitimate government purpose” for differentiating on this account to accomplish DOE’s energy policy goals, its grant terminations violated the Fifth Amendment’s equal protection guarantee. The plaintiffs, according to Judge Mehta, were therefore entitled to relief.
Grant recipients challenging the Administration’s halting of funds should take notice, but they should also be tactful in how they make their arguments going forward. As Judge Mehta highlighted, his ruling did not “conclude that the mere presence of political considerations in an agency action runs afoul of the Fifth Amendment’s guarantee of equal protection.” More narrowly, the decision provided relief where there was overwhelming evidence of grant termination based on whether a state voted for President Trump in the 2024 election. Such evidence has not been hard to collect to date, but similar to the proof needed for First Amendment claims, plaintiffs may be at risk if the Trump Administration can somehow dress up the pig to pass constitutional muster. At the same time, it may be a welcome sign for grant recipients that the Wright plaintiffs’ evidence was already sufficient to overcome the government-friendly rational basis review standard.
Not All Is Lost
More federal courts will decide the fate of energy projects, family assistance funding, and other unspecified money for blue jurisdictions in the coming weeks. Litigant arguments that emphasize Congress’s Article I power and the APA’s statutory requirements have mostly been successful to date, but the landscape around these impoundment arguments is becoming ever more unsettling. The First and Fifth Amendments could provide plausible alternatives for blue-jurisdiction litigants that can gather compelling evidence that they have been unjustly targeted for their political views or associations. In addition to impoundment theories, such litigants would be wise to plead viewpoint discrimination and equal protection theories in upcoming litigation.