The U.S. Department of Housing and Urban Development headquarters. (Photo by HUD Office of Public Affairs)

Nineteen attorneys general and two governors filed suit in Rhode Island on Tuesday to stop the Trump administration from shifting nearly $4 billion in housing grants they say could place as many as 170,000 formerly homeless people back out on the streets.

The group co-led by Rhode Island Attorney General Peter Neronha is accusing the U.S. Department of Housing and Urban Development of violating “congressional intent” in its plan to dramatically reduce the amount of grant funds that can be spent on permanent housing, along with other conditions placed in its latest Notice of Funding Opportunity for Continuum of Care grants.

Enacted Nov. 13, HUD’s new policy instead shifts Continuum of Care funding toward transitional housing and other short-term interventions to the nation’s ongoing homelessness crisis. Only 30% of funds from the $3.9 billion grant program would be allowed to be used for permanent supportive housing — units that provide a subsidized, stable residence for formerly homeless people, often those who have experienced mental illness or spent years on the streets.  

HUD has previously directed approximately 90% of Continuum of Care funding to support permanent supportive units as part of its “Housing First” philosophy, according to the 55-page lawsuit.

“Addressing the crisis requires urgent action from our communities, institutions, and government,” the lawsuit states. “But instead of investing in programs that help people stay safe and housed, the Trump Administration has embraced policies that risk trapping people in poverty and punishing them for being poor.”

HUD’s latest Continuum of Care grants opportunity is open though Jan. 14, 2026. Grant awards are expected to be made May 1.

The new grant rules also eliminate funding for diversity and inclusion efforts, support of transgender clients and use of “harm reduction” strategies that seek to reduce overdose deaths by helping people in active addiction use drugs more safely.

“Individually, these conditions are unlawful and harmful,” the 55-page lawsuit states. “Together, they are a virtual death blow to the CoC Program as it has operated for decades and will lead to predictably disastrous results.”

If the policy isn’t blocked, Neronha warned the cuts would “further exacerbate already dire conditions for homeless Rhode Islanders.” Indeed, Rhode Island’s homeless care providers project a little over 1,000 formerly unhoused people across the state could wind up back on the streets under HUD’s new funding focus.

“This administration continues to punch down by targeting the most vulnerable Americans, and unfortunately this most recent attack on homeless individuals is consistent with their modus operandi,” Neronha said in a statement. “The president and his administration don’t care about making life easier or better for Americans; they only care about political capitulation, consolidating power, and further enriching the wealthy.”

The HUD Press Office said the agency stands by its Continuum of Care reforms in an emailed statement, calling Biden era homelessness assistance policies “an abject failure.”

“In fact, Biden’s policies harmed the vulnerable people that HUD intends to serve through the grant program,” the statement reads. “This new framework is the first step toward righting those failures with increased funding for those high performing programs that have demonstrated real success and accountability. HUD is dismayed that the plaintiffs have chosen to misuse the Courts and pursue this delaying tactic to serve their own personal political agenda at the expense of the homeless individuals, youth and families now living on our Nation’s streets.  Their use of the courts for political means seeks to prevent nearly $4 billion of aid to flow nationwide to assist those in need. HUD intends to mount a vigorous defense to this meritless legal action. HUD is confident that it will prevail in Court and looks forward to implementing the new Continuum of Care framework after it has done so.”

In addition to Neronha, Washington Attorney General Nick Brown and New York Attorney General Letitia James are co-leading the lawsuit. 

Also joining the complaint are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, Oregon, Vermont, Wisconsin, along with the governors of Kentucky and Pennsylvania.

The coalition is asking Judge Mary S. McElroy, who was appointed to the bench during Trump’s first term, to declare the new conditions unlawful and reinstate language from prior funding notices.

HUD framed its new funding policies as a way to promote “self-sufficiency among vulnerable Americans” and align with President Donald Trump’s July 24 Executive Order titled “Ending Crime and Disorder on America’s Streets.”

But the lawsuit filed Tuesday argues that Congress created the Continuum of Care program to ensure stability so providers can reliably serve people whose lives depend on it. The coalition says HUD’s changes are arbitrary and capricious because officials offered no explanation for abruptly reversing longstanding policies.

“HUD has failed to supply any rational explanation for these newly proposed conditions that are entirely unrelated to (and in some cases even inhibit) the statutory purpose of addressing homelessness,” the lawsuit states.

A sign on the entrance to the U.S. National Arboretum is seen as it is closed due to the federal government shut down on Oct. 1, 2025 in Washington, D.C.  (Photo by Kevin Dietsch/Getty Images)

This report has been updated.

WASHINGTON — A federal judge issued a temporary restraining order Wednesday, blocking the Trump administration from moving forward with the thousands of layoffs it initiated after the government shutdown began Oct. 1, as well as any others that officials might want to carry out.  

The hearing in the U.S. District Court for the Northern District of California took place at the same time White House budget director Russ Vought appeared on the conservative Charlie Kirk podcast to preview his next steps.

Vought warned the initial Reductions in Force, the technical term for a layoff notice, were just “a snapshot” and that as many as 10,000 federal workers would lose their jobs if the shutdown drags on.

“We’re going to keep those RIFs rolling throughout this shutdown because we think it’s important to stay on offense for the American taxpayer and the American people,” Vought said. “We want to be very aggressive where we can be in shuttering the bureaucracy, not just the funding, but the bureaucracy.”

Judge Susan Illston said during the hearing that she granted the temporary restraining order because Trump administration officials had “taken advantage of the lapse in government spending, government functioning to assume that all bets are off, that the laws don’t apply to them anymore and that they can impose the structures that they like on the government situation that they don’t like.” 

Illston said laws and regulations still apply during a shutdown and that, by all appearances, the Trump administration’s actions in the case are politically motivated. 

“Things are being done before they’re thought through — very much ready, fire, aim,” Illston said.

The ruling will put the approximately 4,000 layoffs noticed during the shutdown on hold as the court case proceeds. 

DOJ unprepared to speak on merits of case

Elizabeth Hedges, a Justice Department attorney arguing the case on behalf of the Trump administration, said several times during the brief hearing she wasn’t prepared to speak about the merits of the case — a position that confounded the judge, who gave Hedges several chances to reverse course.  

“We may be able to address the merits at the next stage,” Hedges said, after telling Illston she would need to check with others before making any statements about why the administration believes its actions are legal. 

Danielle Leonard, an attorney representing the labor unions that brought the lawsuit, urged the judge to grant a temporary restraining order for all the departments and agencies that make up the executive branch, not just those that have announced RIFs.

Leonard said she believes Trump administration officials have decided how many additional federal employees to lay off during the shutdown, but have opted not to share that information with the court.

“The decision has been made, it’s just a question of implementation and timing,” Leonard said, around the same time Vought was giving his podcast interview. 

Illston, who was nominated by former President Bill Clinton, said at the end of the hearing she expected the attorneys to find a day in the coming weeks when they can attend a hearing on the next stage, which would be a preliminary injunction.

Senate deadlocks for ninth time

On the other side of the country, Republicans and Democrats continued to spar on Capitol Hill over the reasons for the shutdown, as the Senate failed for a ninth time to advance a short-term government spending bill. 

The 51-44 vote was nearly identical to the others that have taken place since mid-September, and neither side appeared inclined to make concessions or even try to negotiate. 

Nevada Sen. Catherine Cortez Masto and Pennsylvania Sen. John Fetterman, both Democrats, and Maine independent Sen. Angus King voted with Republicans to advance the bill. Kentucky GOP Sen. Rand Paul voted no.

Democrats maintain there must be a bipartisan deal to extend the enhanced tax credits that are set to expire at the end of this year for people who get their health insurance from the Affordable Care Act Marketplace. 

GOP leaders said they are willing to begin negotiations on that issue, but only after Democrats vote to advance the stopgap bill that would fund government through Nov. 21. 

The House voted mostly along party lines to approve the legislation in mid-September, but it has remained stalled in the Senate ever since, unable to garner the 60 votes needed to advance toward final passage. Republicans control the chamber with 53 seats.

Congress needs to approve the stopgap bill since it, once again, failed to approve all 12 of the full-year government funding bills by the Oct. 1 start of the new fiscal year.

The only other way to end the funding lapse would be for both chambers to reach a broadly bipartisan consensus on all of those appropriations bills. 

Layoffs across agencies

The layoffs initiated by the Trump administration during the shutdown were detailed further on Tuesday in court filings from the labor unions’ attorneys as well as Trump administration officials.  

Stephen Billy, senior adviser at the Office of Management and Budget, wrote the number of layoff notices had changed since Friday when he outlined the Reductions in Force to the court.

The numbers have fluctuated significantly for some departments, but not for all. 

• Commerce: Approximately 600 employees, up from 315
• Education: Remained at 466 employees
• Health and Human Services: 982 employees, down from a range of 1,100 to 1,200
• Housing and Urban Development: Stayed at 442 employees
• Homeland Security: Decreased to 54 from 176 employees
• Treasury: Reduced somewhat to 1,377 employees, from 1,446 

Energy, EPA layoffs

Federal workers at those departments have 60 days between when the notice was sent and when they will no longer have jobs, though a different standard is in place at the Energy Department and the Environmental Protection Agency. 

Energy officials, the document says, “issued a general RIF notice informing 179 employees that they may receive a specific notice in the future if it is determined they will be part of any RIF. If so, that notice would provide the relevant notice period.”

But a spokesperson for the Energy Department emailed States Newsroom on Tuesday evening to confirm officials had issued RIF notices to workers in the Offices of Energy Efficiency and Renewable Energy, Clean Energy Demonstrations, State and Community Energy Programs and Minority Economic Impact.

“All these offices played a major role in the Biden administration’s war on American Energy,” the spokesperson wrote. “They oversaw billions of dollars in wasteful spending and massive regulatory overreach, resulting in more expensive and less reliable energy. These offices are being realigned to reflect the Trump administration’s commitment to advancing affordable, reliable, and secure energy for the American people and a more responsible stewardship of taxpayer dollars.”

Further confusing the situation at the Energy Department, a footnote in the court document filed by Billy said that particular agency isn’t actually experiencing a lapse in funding. 

The Billy court document said EPA officials sent 28 employees “intent to RIF” notices and will send formal RIF notices “to any affected employees at least 60 days prior to the effective date.” 

A separate document, filed by Thomas J. Nagy Jr., deputy assistant secretary for Human Resources at HHS, said “data discrepancies and processing errors” led to 1,760 employees receiving layoff notices instead of the intended 982.

“Employees have been working since October 10, 2025, to rescind the notices that had been issued in error,” Nagy wrote. 

At CDC, ‘eliminating entire offices’

Yolanda Jacobs, president of the American Federation of Government Employees Local 2883, wrote in a brief to the court that the Centers for Disease Control and Prevention “issued RIF notices to approximately 1,300 employees, eliminating entire offices at the agency. Then, within 24 hours, the CDC rescinded approximately 700 of those RIF notices.” 

Jacobs wrote the 600 CDC workers who received RIFs will officially lose their jobs on Dec. 8, even though they have already lost access to work email and computers. 

“Many Union members have told me that they are experiencing serious mental health problems and have found it very difficult to get their work done, given all of the turmoil that they have experienced this year,” Jacobs wrote, referencing previous RIF notices and reinstatements. “Members have told me that they worry on a day-to-day basis about whether they will have a job the next day. They said that they have felt like the Trump Administration has been using them as bargaining chips this year.”

Jacobs wrote that the Trump administration has decided to lay off many human resources workers, which had blocked other workers who received RIFs from being able to get information about how to roll over their health insurance coverage. 

During past RIFs, she wrote, workers had “access to the employment records, including paystubs and performance records, that they need for processing their separations,” but cannot since they are locked out of computer systems. 

Layoffs hit Department of Education

Rachel Gittleman, president of AFGE Local 252, which represents nearly 3,000 Education Department workers, wrote in a separate filing the layoffs will impact numerous programs, including civil rights, communications and outreach, elementary and secondary education, post secondary education, and special education and rehabilitative services.

“Receiving RIF notices has caused many employees enormous stress. A father of two young boys contacted me—he just moved into a new home and relies on his job to support his family,” Gittleman wrote. “He told me (he) doesn’t know what he will do next.”

Workers on maternity or disability leave also received layoff notices, “forcing them to job-hunt and face financial insecurity while managing newborns or health conditions,” she wrote. 

Following past RIF notices, the department provided “career transitioning and counseling, benefits and retirement training, and access to other human resources and employee assistance programs.” But Gittleman wrote that isn’t happening this time. 

‘Devastated’ HUD employees

Ashaki Robinson, regional vice president for AFGE Council 222, which represents nearly 5,000 HUD workers, said the layoff notices for that department will impact employees in Florida, Georgia, Kansas, Massachusetts, Puerto Rico, Texas and Washington, D.C., who manage a variety of programs. 

“They are devastated that the RIF is happening and are very concerned about losing their incomes, health insurance coverage for themselves and dependents, and other employment benefits in 60 days, when they will be separated from employment,” Robinson wrote. 

The hundreds of HUD workers who have received RIF notices, she wrote, were “targeted for termination not because of anything they did themselves, but because of decisions made by elected officials that may have been driven by politics.”