District Court Blocks Federal Effort To Enact ‘Termination Clause,’ Including Defunding Of State Social Service Grants

A federal district court ruled that the U.S. Office of Management and Budget (OMB) and several federal grant-making agencies cannot terminate state grant funding, including funding for social service programs, based on agency priorities established after the grants were originally awarded. The court granted summary judgment in favor of 20 states, three governors, and the District of Columbia, who challenged the government's interpretation of a regulation known as the "Termination Clause."

The lawsuit centers on Code Of Federal Regulations Title 2, Section 200.340: Termination (C.F.R. Section 200.340), a federal regulation first issued by . . .