As Trump admin moves to claw back more federal grants, NYC pursuing ‘legal recourse’

The Trump administration is moving to claw back an additional $107 million in federal grants awarded to New York City to help cover the cost of sheltering and caring for asylum-seekers. Mayor Eric Adams says the city will continue its legal fight to block the money grab.

Unlike the feds’ last seizure of migrant funding, the city got some formal warning this time. City officials were notified in an April 1 letter that the Department of Homeland Security, and the Federal Emergency Management Agency, would be terminating an additional $106.8 million grant already awarded to help offset costs of providing shelter and service to asylum-seekers. Acting FEMA Administrator Cameron Hamilton wrote that grant programs that support or could support “illegal immigration through funding illegal activities or support for illegal aliens that is not consistent with DHS’s enforcement focus” go against the agency’s priorities. The letter provided a 30-day window to challenge the termination of the award. It’s unclear what further communication the city has had with the federal government since April 1.

But the city is already in litigation against the Trump administration to recover a large chunk of federal money it’s relying on to help cover billions in asylum-seeker costs. “Like their previous actions clawing back appropriated funds, these steps are unlawful, and the New York City Law Department is currently determining the best legal recourse to take to ensure that this money remains in New York City, where it was allocated and belongs,” Adams said in a statement. 

In February, the Trump administration directly seized roughly $80 million in grants already transferred to the city by the Federal Emergency Management Agency. The move came after Elon Musk shared an unfounded claim on X that a large chunk of the grant had gone to fund “luxury hotels” to house migrants. City officials have said that the money instead went to shelters for migrants, security and roughly $19 million in hotel fees, among other costs.

With more funding now under the federal government’s axe, it’s unclear whether the city Law Department will file a new lawsuit or seek to amend its existing suit. The city lost an initial motion to have the federal government immediately return the $80 million in March.

Local governments – particularly those led by Democrats – suing to block actions by the Trump administration is nothing new. But Adams’ public criticism of the clawback and involvement in the lawsuit is notable following his closer alignment with Trump in recent months. Until last week, Adams faced federal corruption charges that were filed last fall before Trump was elected. In addition to refusing to criticize Trump during the later months of the 2024 election, Adams said after Trump was elected that he would collaborate on his immigration enforcement agenda. Trump’s Department of Justice requested that the charges against Adams be dropped in February, and a judge recently agreed to do so. Though the former top Manhattan federal prosecutor alleged as much, Adams and his legal team have denied that any quid pro quo agreement was in place with the Trump administration to have the charges dropped in exchange for collaborating on their policy priorities.