New York Attorney General Letitia James has announced imminent legal action against the Trump administration over its recent pause on certain federal grants and loans.

James, who has repeatedly targeted former President Donald Trump in legal battles, argues that the administration’s decision is unconstitutional and will harm communities relying on federal funds.

The funding pause stems from an internal memorandum issued by the Office of Management and Budget (OMB) under Acting Director Matthew Vaeth.

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The memo, released on Monday, orders a temporary halt on federal financial assistance to assess compliance with President Trump’s executive orders.

The administration’s priorities include curbing spending on diversity, equity, and inclusion (DEI) initiatives, foreign aid, and clean energy programs.

The OMB directive notes that over $3 trillion of the federal government’s $10 trillion Fiscal Year 2024 budget is allocated to grants and loans. Vaeth stated that the pause is designed to ensure taxpayer dollars are directed toward advancing the administration’s goals, including “unleashing American energy and manufacturing,” “ending wokeness,” and “promoting efficiency in government.”

As part of the review, federal agencies have been instructed to identify funding programs that conflict with new executive orders such as Protecting the American People Against Invasion and Ending Radical and Wasteful Government DEI Programs.

The directive, which takes effect on January 28, 2025, requires agencies to suspend financial assistance related to foreign aid, DEI, and green energy programs while the administration conducts its review.

Agencies must submit detailed reports to OMB by February 10, 2025, outlining which programs align with or contradict the president’s policies.

Vaeth emphasized that the funding review is intended to redirect resources toward “supporting hardworking American families” and ensuring fiscal responsibility.

Agencies are also expected to ensure compliance through senior political appointees and may cancel awards that do not align with administration priorities.

Notably, the funding pause does not impact Social Security, Medicare, or direct payments to individuals.

James quickly condemned the administration’s move, calling it “reckless and dangerous.”

In a post on X (formerly Twitter) on Monday, she wrote, “Programs in communities across the entire nation depend on this funding to support our families, and this action is only going to hurt them.”

My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding.

We won’t sit idly by while this administration harms our families. https://t.co/zAbu7TFnte

— NY AG James (@NewYorkStateAG) January 28, 2025

By Tuesday, she escalated her response, stating, “My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding. We won’t sit idly by while this administration harms our families.”

BREAKING: NY AG Letitia James sues the Trump administration after freeze on federal funding

The lawfare campaign against the President continues! pic.twitter.com/JIIpzYvhMa

— Breaking911 (@Breaking911) January 28, 2025

James has been a key figure in legal challenges against Trump for years, leading multiple lawsuits against him and his business empire.

One of the most significant cases was filed in September 2022, in which she accused Trump, his three eldest children, and the Trump Organization of financial misconduct.

The lawsuit claimed that Trump and his company engaged in fraudulent asset valuation practices to secure favorable loans and insurance deals.

James’ office cited more than 200 instances of fraud and sought $250 million in damages, along with barring Trump and his family from serving as executives in New York-based companies.

Following a lengthy trial, Judge Arthur Engoron ruled against Trump in February 2024, ordering him to pay $354.8 million in disgorged gains and imposing a three-year ban on holding officer or director roles in New York corporations.

James’ latest legal challenge against the Trump administration’s funding pause marks yet another battle in her ongoing legal war with the former president.

Trump’s lawyer Mike Davis issues dark warning to NY AG Letitia James:

“I dare you to try to continue your lawfare against President Trump… listen here, sweetheart, we’re not messing around this time and we will put your fatass in prison for conspiracy against rights.” pic.twitter.com/FfGGxzsaq6

— Benny Johnson (@bennyjohnson) November 7, 2024

With the administration moving forward with its financial review, the legal fight over federal funding is expected to intensify in the coming weeks.

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