Attorney General Bonta Opposes Trump Administration’s Sweeping Proposal to Allow for Widespread Political Weaponization of Federal Grant Funding

OMB’s proposed rule would provide Trump Administration with broad authority to impose its political agenda via more than $1 trillion in federal grant funding each year

OAKLAND — California Attorney General Rob Bonta today joined a coalition of 22 attorneys general and two governors in submitting a comment letter opposing the Office of Management and Budget's (OMB) proposed rewrite of rules governing nearly every federal grant. The proposed rule — entitled the "Regulation for Federal Financial Assistance" — would wrest the power of the purse away from Congress, provide new tools for the Trump Administration to leverage federal funds to impose a radical political agenda on states based on differences in policy, and put political appointees in charge of grantmaking. Moreover, the proposed rule would formalize practices that the courts have repeatedly blocked over the past 18 months — often in cases brought by Attorney General Bonta and other attorneys general. In the letter, Attorney General Bonta and the coalition argue that the proposed rule is unconstitutional and would threaten vital funding for education, social services, scientific research, and public safety based solely on the political whims of the Trump Administration. 

“The Trump Administration is once again attempting to weaponize essential federal funding to advance its policy priorities. Except this time, it’s not just one agency, it’s almost all of them,” said Attorney General Bonta. “This proposal aims to undermine practically every industry and public service supported by federal funding by providing OMB with sweeping authority to condition or terminate grants for programs, initiatives, and research that the Trump Administration does not like. However, it is Congress, not the President, that gets to wield the power of the purse — as we’ve shown, successfully, time after time in court. This rule clearly exceeds OMB’s authority, and we urge OMB to withdraw it.” 

BACKGROUND

The U.S. Constitution is clear: Congress, not the President, decides how federal money is spent. Congress also designs spending programs intended to provide services to residents and communities — spending that the federal government generally has by virtue of the taxes paid to it by states like California. Yet, despite the constraints imposed by Congress and the U.S. Constitution, the Trump Administration has time and again attempted to terminate grants for any reason or political inclination, including the variety of Presidential Executive Orders pertaining to immigration status, “gender ideology,” athletic opportunities for transgender athletes, and diversity, equity, or inclusion, among others. 

In the past, these were largely stand-alone efforts confined to individual agencies. However, with this proposal, practically all federal grants and agencies would be impacted. By converting existing guidance into binding government-wide regulations, the rule would concentrate authority with OMB and give agencies and political appointees the power to dictate, review, and terminate discretionary funding at will.  

In hundreds of lawsuits across the country, the Trump Administration’s attempts to seize control over spending have been challenged and rebuked, including in rulings against OMB’s unbounded vision of executive control and unlawful funding gamesmanship that puts the health and safety of Californians at risk. Earlier this year, Attorney General Bonta secured a decision by the Court of Appeals for the First Circuit upholding an injunction blocking OMB’s January 2025 directive to freeze federal financial assistance nationwide. He also secured a federal court order blocking OMB’s directive to terminate $600 million in public health grants from the Centers for Disease Control and Prevention, targeting just four Democratic-led states, including California, over policy disagreements. 

PROPOSED OMB RULE

On May 29, OMB and more than 40 federal agencies rolled out the lengthy rule that would effectively give the Trump Administration sweeping power over federal spending. As proposed, it allows OMB and 41 agencies to inject program-level specific conditions on all federal grants, which could then be used to terminate grants in whole or in part at any time, impacting the more than $1 trillion in grants and cooperative agreements the federal government obligates each year.

The proposed rule also gives the President’s political appointees authority to force grantees to comply with the Administration’s radical political agenda on anti-discrimination principles, gender identity, immigration, and more. Such authority would allow political appointees to disregard the opinions of the scientific community and rely instead on adherence to political considerations. This would damage the economy at large by threatening programs that fund essential needs like food, education, healthcare, housing, and childcare. The new uncertainty could raise the costs and delay services, resulting in slower, costlier projects. 

Taken together, these changes reflect an illegal and unconstitutional effort to use federal grantmaking as a policy enforcement tool.  

MULTISTATE OPPOSITION

In today’s letter, Attorney General Bonta and the coalition call for OMB to withdraw its proposal. Attorney General Bonta and the coalition argue, among other things, that the rule:

1. Violates the Administrative Procedure Act by exceeding OMB’s authority and allowing the agency to oversee substantive policy issues beyond its limited role to primarily provide guidance on financial management, while also generally disregarding the interests of the states and other grant recipients who have built and operate the federal programs supporting communities, businesses, and schools.  
2. Bypasses required stakeholder involvement by circumventing the negotiated rulemaking for programs within Title VI of the Higher Education Act and fails to consider and minimize the cost of rapidly implementing the wide-reaching new documentation requirements, in violation of the Paperwork Reduction Act. 
3. Violates the U.S. Constitution by allowing agencies to enforce standardless federal conditions on recipients at any time or direct funding decisions on unclear factors Congress never made relevant to the federal grants. For example, the proposed rule would allow a grant to be denied simply because the applicant did not adequately demonstrate the project would advance “the President’s priorities.” 
4. Commandeers the states to become reputation police for the federal government. The proposed rule requires states to ensure many of their county, city, and nonprofit partners take no action that could “damage the reputation” of the federal government — with the state’s own funding on the line. 

In submitting the comment letter, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin and governors of Kentucky and Pennsylvania.