New York Attorney General Letitia James has once again directed her focus towards President Donald Trump, revealing plans for imminent legal action concerning his administration’s recent suspension of certain federal funding. For those acquainted with James’ professional trajectory, this development is hardly unexpected. Throughout her tenure, the Democratic Attorney General has emerged as one of Trump’s most prominent legal challengers.
The recent suspension of all federal grants and loans by the Trump administration is the focal point of this new legal initiative. An internal memorandum from the White House budget office disclosed that the administration has temporarily halted financial assistance to evaluate adherence to the president’s executive orders, which include directives aimed at curtailing expenditures on diversity, equity, and inclusion (DEI) initiatives, clean energy projects, and foreign aid.
The Office of Management and Budget (OMB), led by Acting Director Matthew Vaeth, issued a memorandum on Monday that mandated a temporary suspension of federal financial assistance programs to ensure alignment with President Trump’s priorities. The memorandum emphasized that over $3 trillion of the federal government’s $10 trillion Fiscal Year 2024 budget is designated for grants and loans.
Vaeth articulated that the purpose of the suspension is to guarantee that taxpayer funds are utilized to further the Administration’s objectives, which include “unleashing American energy and manufacturing,” “ending wokeness,” and “promoting efficiency in government.”
Federal agencies have been directed to identify programs that are at odds with President Trump’s new executive orders, such as “Protecting the American People Against Invasion” and “Ending Radical and Wasteful Government DEI Programs.”
Effective January 28, 2025, agencies are required to cease financial assistance activities, including foreign aid, DEI initiatives, and green energy programs, pending a thorough review. By February 10, 2025, agencies must submit program details to the OMB.
Vaeth indicated that the objective is to reallocate funds towards “supporting hardworking American families.” Agencies are expected to ensure compliance through senior political oversight.
The suspension is not intended to affect Social Security or Medicare, nor does it influence direct payments to individuals. Officials from the Trump administration contend that this suspension is a crucial measure to promote fiscal responsibility and align with the administration’s objectives.
Attorney General James expressed her concerns on X on Monday, stating, “This administration’s suspension of federal funding is both reckless and perilous. Numerous programs across the nation rely on this funding to assist our families, and this decision will only exacerbate their struggles.”
On Tuesday, James announced via X, “My office will initiate immediate legal action against this administration’s unconstitutional suspension of federal funding. We will not remain passive while this administration jeopardizes our families.”
The New York Attorney General has been a key player in legal actions against President Trump, focusing on him and his business interests in several notable cases. One of the most significant lawsuits, initiated in September 2022, accused Trump, along with his three eldest children and the Trump Organization, of extensive financial misconduct.
The allegations assert that they inflated asset values to obtain favorable loans and insurance conditions, with the lawsuit detailing over 200 instances of fraud. James sought $250 million in damages and aimed to prevent Trump and his family members from holding executive positions in New York-based companies.
The case reached its conclusion in February 2024, following a protracted trial, when Judge Arthur Engoron ruled against Trump. The ruling imposed substantial penalties, including $354.8 million in disgorged profits, along with a three-year prohibition on Trump serving as an officer or director in New York corporations—part of a broader legal strategy by Democratic attorneys general to financially undermine the President during his campaign.
