Pennsylvania governor sues over Trump administration spending freezes on grants and loans

[February 14, 2025]  By MARC LEVY

HARRISBURG, Pa. (AP) — Pennsylvania Gov. Josh Shapiro on Thursday sued agencies under President Donald Trump, saying they are illegally and unconstitutionally withholding billions in federal aid from the state that had already been approved by Congress.

Shapiro, a Democrat, filed the lawsuit despite the fact that federal courts have repeatedly rejected the Trump administration's sweeping pause on federal funding, and Shapiro's lawyers suggest that the Trump administration is continuing to ignore court orders to restore access to the suspended money.

The lawsuit, filed in federal court in Philadelphia, calls actions by the federal agencies “flagrantly lawless” and said the agencies have no legal authority to unilaterally refuse to spend congressionally appropriated money over a policy disagreement.

Further, the agencies have provided no plausible explanation for the suspension, Shapiro's lawyers said.

Shapiro, his agencies and members of Congress have tried to try to fully restore access to the money, the lawsuit said.

“Despite that work, and despite two temporary restraining orders requiring federal agencies to restore access to suspended funds, federal agencies continue to deny Pennsylvania agencies funding that they are entitled to receive,” the lawsuit said.

Most of the federal agencies named as defendants — the White House Office of Management and Budget, the Environmental Protection Agency and the departments of Interior and Transportation — did not immediately comment on the lawsuit.

In the Department of Interior's case, it said its policy is not to comment on pending litigation. The Department of Energy, in a one-sentence statement, said it is complying with the court orders, but didn't say whether it had released funding to upgrade energy efficiency in homes that Shapiro's administration accused it of holding up.

The Trump administration issued a memo in late January freezing federal grants and loans, saying it was necessary to review whether spending aligned with Trump’s executive orders on various issues such as climate change.

Pennsylvania Gov. Josh Shapiro delivers his budget address for the 2025-26 fiscal year to a joint session of the state House and Senate at the Capitol is seen, Tuesday, Feb. 4, 2025, in Harrisburg, Pa. (AP Photo/Matt Rourke)

The freeze caused widespread chaos.

The Trump administration rescinded the memo less than two days later, but money for things such as early childhood education, pollution reduction and HIV prevention research remained tied up, nearly two dozen Democratic-led states said in a federal lawsuit.

A judge ordered the administration on Monday to “immediately take every step necessary” to unfreeze all federal grants and loans, finding that the Trump administration hadn't fully followed his earlier order. The Trump administration quickly appealed the ruling and lost Tuesday.

In Pennsylvania’s case, the Shapiro administration said about $2.5 billion in grants or reimbursements committed to Pennsylvania is now suspended or under some sort of review that hasn’t been approved by Congress or any funding agreement, and hasn’t been explained to Shapiro’s administration.

Much of the stalled grant funding was passed by Congress in signature laws signed by former President Joe Biden, his landmark 2022 climate law, the Inflation Reduction Act, and his 2021 infrastructure law.

In addition to funding to upgrade energy efficiency in homes, the lawsuit said aid is being withheld from programs that distribute money to plug abandoned gas wells, clean up abandoned mine land, improve municipal water and sewer systems and reimburse industry for cutting their planet-warming greenhouse gas emissions.

Shapiro's lawyers said the administration cannot legally add new conditions to federal aid after a state has already accepted it, and federal aid cannot be shut off unless it is for a reason that is specifically laid out by the law or a funding agreement between a state and federal agency.

That violates the spending clause of the U.S. Constitution, Shapiro's lawsuit said.

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