Lawsuit ensures states’ ability to recover Congressionally appropriated federal funding impounded by the Trump Administration ahead of the end of fiscal year 

October 1, 2026 - OAKLAND — California Attorney General Rob Bonta on Wednesday, leading a multistate coalition, filed a lawsuit challenging the Trump Administration’s unlawful attempt to impound Congressionally appropriated federal funding that is crucial for states and their residents. This is the latest front in a multi-year campaign of failed attempts by the Trump Administration to stop, terminate, withdraw, or condition funding to states supporting policies Congress has chosen to fund but with which the President disagrees. In fact, more than one-third of the lawsuits Attorney General Bonta has filed against the current administration have involved attempts to restrict, rescind, or unlawfully condition federal funding to states, including California. But it is Congress, not the President, that wields the power of the purse. In today’s lawsuit, filed in the U.S. District Court for the Northern District of California, Attorney General Bonta and the coalition argue that the impoundment of federal funding, including the President’s recently announced “pocket rescission,” violates the U.S. Constitution and the Administrative Procedure Act.  

“I continue to be appalled by President Trump’s blatant disregard for the basic Constitutional framework of our government. Just because the President doesn’t like a program doesn’t mean he can defund it. Congress — the part of our government closest to the people — has the power of the purse. That structure exists for a reason: It protects the people from the authoritarian policy choices of a single person,” said Attorney General Bonta. “No President has ever worked so hard to rip healthcare, childcare, housing, and educational opportunities away from families. He should be ashamed. We’re going to court — once again — to protect against the rampant abuses of power by this Administration.” 

On September 25, 2026, five days before the end of the fiscal year, President Trump announced that his Administration would unilaterally rescind $810 million that it had determined “does not benefit American citizens.” Additionally, as of September 30, 2026, other Congressionally appropriated funding appears to remain unobligated and is therefore at risk of expiring, including funding for emergency services and education.

In the lawsuit, Attorney General Bonta and the coalition argue that impoundment — the Administration’s refusal to spend funds Congress has lawfully appropriated for particular purposes — violates the Separation of Powers Clause, the Appropriations Clause, and the Presentment Clause of the U.S. Constitution. The coalition further argues that the impoundment of funds is unlawful agency action in violation of the Administrative Procedure Act. 

Attorney General Bonta has repeatedly stood up to the President’s illegal attacks on federal funding for California — protecting an estimated $208 billion in funding for public safety, victims of crimes, education, childcare, food assistance, healthcare, biomedical research, transportation, clean energy, museums and libraries, and other vital programs and benefits Californians rely on. This includes: 

• Stopping the Trump Administration’s unlawful freeze of $10 billion in funding for childcare and family assistance in five states including California over unsupported allegations of fraud.
• Protecting roughly $8.7 billion through a preliminary injunction in his challenge to the Trump Administration’s attempt to impose new discriminatory conditions on U.S. Department of Agriculture grants. 
• Blocking the Trump Administration’s attempt to shut down the Building Resilient Infrastructure and Communities program, which helps communities prepare for and mitigate the risks from disasters before they happen. California anticipates receiving up to $1.1 billion in funding for various projects across the state.
• Stopping the Trump Administration's attempt to impose immigration enforcement conditions on transportation funding amounting to an estimated $7.7 billion.
• Blocking the Trump Administration’s attempt to withhold all federal education funding to California not once, but twice: Securing a court order rejecting the U.S. Department of Education’s demands that state and local education agencies certify compliance with the Department’s unlawful re-interpretation of Title VI of the Civil Rights Act and preventing the withholding of funding under the guise of enforcing the Family Educational Rights and Privacy Act.
• Securing a permanent court order stopping $300 million in unlawful and drastic National Institutes of Health funding cuts from taking effect. 

Attorney General Bonta is joined by the attorneys general of Maine, Maryland, Michigan, Nevada, New Mexico, and Oregon in filing the lawsuit.

Source: CA. DOJ