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States filed yet another motion on Monday asking the court to release urgently needed disaster relief.
In case you missed it: The Federal Emergency Management Agency has continued to withhold millions of dollars from states for disaster recovery, relief, and preparedness despite a district court’s order from March 6 calling on the administration to release the funds.
Among the more than 200 FEMA grants to states that remain frozen are a case management program for survivors of the 2023 Maui wildfires, emergency readiness projects in Oregon, and flood hazard mitigation in Colorado, according to a motion filed on Monday in the lawsuit State of New York v. Trump.
The motion was filed the day after Homeland Security Secretary Kristi Noem said her department would move to “eliminate” FEMA during a cabinet meeting.
Twenty-two states plus the District of Columbia filed the suit in the U.S. District Court for the District of Rhode Island in late January, after President Trump’s Office of Management and Budget issued a directive to federal agency heads to conduct a review of funding related to “foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” and to pause disbursement of any related funds in the meantime. The states argued that the memo and the executive orders it cites were unconstitutional.
The states sought an injunction on the pause, which Chief Judge John McConnell Jr., a Biden appointee, granted in early March. “The Executive’s categorical freeze of appropriated and obligated funds fundamentally undermines the distinct constitutional roles of each branch of our government,” he wrote in the ruling. “Here, the Executive put itself above Congress. It imposed a categorical mandate on the spending of congressionally appropriated and obligated funds without regard to Congress’s authority to control spending.”
The Trump administration filed notice with the U.S. First Circuit Court of Appeals in Boston that it is appealing the injunction a few days after it was issued.
Prior to the injunction order, the states had identified the disruptions from the pause on FEMA funds as being “particularly acute and widespread.” So as part of the injunction, the Judge directed FEMA to file a status report by March 14 detailing its compliance. But rather than detailing the release of grants previously held hostage, the status report federal lawyers filed on March 14 argued that the agency had “inherent authority” to conduct a “manual review” of the grants, and therefore it is not violating the court’s injunction by continuing to review — and therefore withhold — previously obligated funds.
“This manual review process is not a ‘pause’ or ‘freeze’ on funding,” the status report says, “nor does it mean that the grant is being frozen, held, or not being distributed.”
On Monday, states filed a motion calling BS on this argument and requesting that the court use its authority to enforce the injunction. This was urgent, they argued, because as the end of the first quarter nears, the lack of access to funding is going to start disrupting crucial programs.
If Hawaii doesn’t start receiving reimbursements for its federally-funded case management program by March 31, for example, it will be forced to immediately discontinue its work helping more than 4,000 wildfire survivors create tailored disaster recovery plans and navigate recovery resources. The state used to have to wait approximately a week for FEMA to review reimbursement requests and transfer the funds. Now it’s been waiting nearly 30 days. “This abrupt change in practice is near fatal because a key requirement of FEMA regarding these grant funds is that Hawaiʻi is precluded from maintaining more than three business days’ worth of cash on hand,” the states’ filing says.
FEMA is still issuing funds for some activities. The agency approved Fire Management Assistance Grants for North and South Carolina this week, where several major wildfires have been burning for weeks.
While the Trump administration fights the injunction in court, its supporters in Congress are fighting it on the floor. House Representative Andrew Clyde of Georgia introduced articles of impeachment against Judge McConnell on Tuesday, the latest in a series of such moves to impeach federal judges that have ruled against Trump’s actions. This is despite a warning from the Supreme Court’s Chief Justice, John Roberts, last week in a rare public statement, that “impeachment is not an appropriate response to disagreement concerning a judicial decision.”
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“We had enough assurance that the president was going to deal with them.”
A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.
Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.
It’s not entirely clear what the president could do to unilaterally “deal with” tax credits already codified into law. Norman declined to answer direct questions from reporters about whether GOP holdouts like himself were seeking an executive order on the matter. But another Republican holdout on the bill, Representative Chip Roy of Texas, told reporters Wednesday that his vote was also conditional on blocking IRA “subsidies.”
“If the subsidies will flow, we’re not gonna be able to get there. If the subsidies are not gonna flow, then there might be a path," he said, according to Jake Sherman of Punchbowl News.
As of publication, Roy has still not voted on the rule that would allow the bill to proceed to the floor — one of only eight Republicans yet to formally weigh in. House Speaker Mike Johnson says he’ll, “keep the vote open for as long as it takes,” as President Trump aims to sign the giant tax package by the July 4th holiday. Norman voted to let the bill proceed to debate, and will reportedly now vote yes on it too.
Earlier Wednesday, Norman said he was “getting a handle on” whether his various misgivings could be handled by Trump via executive orders or through promises of future legislation. According to CNN, the congressman later said, “We got clarification on what’s going to be enforced. We got clarification on how the IRAs were going to be dealt with. We got clarification on the tax cuts — and still we’ll be meeting tomorrow on the specifics of it.”
Neither Norman nor Roy’s press offices responded to a request for comment.
The state’s senior senator, Thom Tillis, has been vocal about the need to maintain clean energy tax credits.
The majority of voters in North Carolina want Congress to leave the Inflation Reduction Act well enough alone, a new poll from Data for Progress finds.
The survey, which asked North Carolina voters specifically about the clean energy and climate provisions in the bill, presented respondents with a choice between two statements: “The IRA should be repealed by Congress” and “The IRA should be kept in place by Congress.” (“Don’t know” was also an option.)
The responses from voters broke down predictably along party lines, with 71% of Democrats preferring to keep the IRA in place compared to just 31% of Republicans, with half of independent voters in favor of keeping the climate law. Overall, half of North Carolina voters surveyed wanted the IRA to stick around, compared to 37% who’d rather see it go — a significant spread for a state that, prior to the passage of the climate law, was home to little in the way of clean energy development.
But North Carolina now has a lot to lose with the potential repeal of the Inflation Reduction Act, as my colleague Emily Pontecorvo has pointed out. The IRA brought more than 17,000 jobs to the state, per Climate Power, along with $20 billion in investment spread out over 34 clean energy projects. Electric vehicle and charging manufacturers in particular have flocked to the state, with Toyota investing $13.9 billion in its Liberty EV battery manufacturing facility, which opened this past April.
North Carolina Senator Thom Tillis was one of the four co-authors of a letter sent to Majority Leader John Thune in April advocating for the preservation of the law. Together, they wrote that gutting the IRA’s tax credits “would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” It seems that the majority of North Carolina voters are aligned with their senator — which is lucky for him, as he’s up for reelection in 2026.
SpaceX has also now been dragged into the fight.
The value of Tesla shares went into freefall Thursday as its chief executive Elon Musk traded insults with President Donald Trump. The war of tweets (and Truths) began with Musk’s criticism of the budget reconciliation bill passed by the House of Representatives and has escalated to Musk accusing Trump of being “in the Epstein files,” a reference to the well-connected financier Jeffrey Epstein, who died in federal detention in 2019 while awaiting trial on sex trafficking charges.
The conflict had been escalating steadily in the week since Musk formally departed the Trump administration with what was essentially a goodbye party in the Oval Office, during which Musk was given a “key” to the White House.
Musk has since criticized the reconciliation bill for not cutting spending enough, and for slashing credits for electric vehicles and renewable energy while not touching subsidies for oil and gas. “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Musk wrote on X Thursday afternoon. He later posted a poll asking “Is it time to create a new political party in America that actually represents the 80% in the middle?”
Tesla shares were down around 5% early in the day but recovered somewhat by noon, only to nosedive again when Trump criticized Musk during a media availability. The shares had fallen a total of 14% from the previous day’s close by the end of trading on Thursday, evaporating some $150 billion worth of Tesla’s market capitalization.
As Musk has criticized Trump’s bill, Trump and his allies have accused him of being sore over the removal of tax credits for the purchase of electric vehicles. On Tuesday, Speaker of the House Mike Johnson described Musk’s criticism of the bill as “very disappointing,” and said the electric vehicle policies were “very important to him.”
“I know that has an effect on his business, and I lament that,” Johnson said.
Trump echoed that criticism Thursday afternoon on Truth Social, writing, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” He added, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk replied, referring to the vehicles NASA uses to ferry personnel and supplies to and from the International Space Station.