States Sue Trump Over Withheld Funds

California and six other states sued the Trump administration for withholding congressionally approved federal funds. The lawsuit challenges the use of pocket rescissions to block spending.

Clouds cast the US Capitol building into shadow in Washington, D.C., US, September 30, 2026. REUTERS/Kylie Cooper

California and six other states filed a lawsuit against the Trump administration on Wednesday over $810 million in withheld federal funds. The legal challenge targets a White House move to cancel congressional appropriations before the fiscal year ended. The dispute escalates a battle over presidential spending authority in the United States.

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