How a Supreme Court Ruling May Have Rewritten Fiscal Democracy—and What That Means for the States
April 4, 2025. In a 5–4 decision that’s flying under most people’s radar, the Supreme Court may have just cracked the constitutional foundation of American democracy.
The Court granted an emergency stay to the Department of Education, letting the executive branch cancel more than $600 million in Congressionally authorized teacher-training grants—with no legislative process, no justification, and no public accountability.
What seemed like a technical ruling? It might just be the moment we stopped asking whether separation of powers still exists.
Because now, the executive can override Congress. And the people—taxpayers, teachers, communities—don’t get a say.
What Was Actually Cut?
The programs—Teacher Quality Partnership (TQP) and Supporting Effective Educator Development (SEED)—were designed to train educators in underserved districts. They were already funded. Already rolling out. Already helping.
But in February, the Department—reshaped by Project 2025 priorities—moved to cancel them. Their rationale? The programs were “promoting DEI” and not aligned with the administration’s vision.
States Sued. Lower Courts Agreed. SCOTUS Said: Never Mind.
District and appellate courts found the terminations likely illegal under the Administrative Procedure Act (APA). But SCOTUS didn’t weigh the merits. They simply said: the cancellation can proceed.
Which means the executive can now void appropriated federal funding at will—based on ideological taste.
Is Congress Still in Charge of the Purse?
That’s the constitutional crisis.
Article I gives Congress the power of the purse. But this ruling shifts the ground. If the executive can cancel funding—funding already passed into law—it functionally reverses the budget process.
Justice Jackson Didn’t Hold Back
In her dissent, Justice Ketanji Brown Jackson, joined by Justices Sotomayor and Kagan, wrote:
“This is policymaking through cancellation. The Government hasn’t even attempted to justify the terminations. And the Court now blesses this strategic decision.”
Strategic. Not legal. Not democratic. Strategic.
So What’s Really Happening?
Federal funds—once a neutral mechanism for public service—are now a weaponized ideological tool. The message is clear:
If your program promotes equity, inclusion, climate, or LGBTQ rights—it’s at risk.
And it doesn’t stop there.
Enter DOGE: Cutting the Ground Out from Under the States
While this legal shift plays out, another institution is taking aim at enforcement itself: the Department of Government Efficiency (DOGE)—a new Trump-era body led by Elon Musk.
DOGE has ordered the closure of over 100 IRS offices and terminated more than 750 federal building leases, especially in blue states.
What’s left? In places like California, New York, Washington and Oregon: federal withdrawal.
No field agents. No auditors. No taxpayer assistance centers.
And without physical presence, how do you enforce federal law?
A Vacuum in the System
What’s being created isn’t just chaos. It’s an opportunity—for states to act.
From Sacramento to Albany, policymakers and legal observers are now asking:
If the feds won’t fund or enforce, why should we collect for them?
States haven’t taken action. But the pieces are falling into place for a new model of governance. Not secession. Not rebellion. Something more administrative—and perhaps more potent:
Fiscal Sovereignty.
What Might That Look Like?
Legal scholars and policy strategists (again, not states themselves) are floating ideas:
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Intercepting federal payroll taxes via state systems
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Creating trust funds to replace revoked federal grants
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Passing laws to shield state-funded education, health, and civil rights programs from federal ideologues
It’s not lawless. It’s resistance through structure.
And if the Supreme Court says the executive can walk away from funding obligations—why can’t states walk away from remitting funds?
Thought Experiment: California Says No
Let’s imagine: California, after a cascade of defunded programs, declares it will pause federal tax transfers—pending federal compliance with civil rights law.
It reallocates the money to rebuild banned programs: DEI in schools, trans health care, climate preparedness.
Legal? No. Constitutional? Debatable. Democratically legitimate? Increasingly, yes.
Because when the federal government stops fulfilling its contract, states—and their people—start looking for new terms.
And Here Comes the DEI Crackdown
On April 3, just a day before the SCOTUS ruling, the Department of Education told public K–12 schools: dump DEI or lose federal funding.
Schools were given 10 days to comply. The memo labeled equity programs as discriminatory.
According to NPR and The Hill, this wasn’t regulation. It was a purge.
It draws directly from Executive Order 14190, which bans “anti-American education” and reinstates the 1776 Commission.
This Is About More Than Funding
It’s about defining American values by fiat. And it’s about conditioning money on obedience.
Want teacher training? Abandon racial justice.
Want federal lunch funding? Teach “patriotism.”
Want broadband expansion? Drop gender studies.
In this new order, funding is not a right. It’s a reward.
What Can the States Do?
DOGE’s shuttering of federal offices may make action easier.
With federal infrastructure dismantled, and the Supreme Court giving ideological green lights to executive defunding, the resistance may not be led by lawsuits—but by local accounting.
States could begin administering federal-like programs themselves.
They could refuse cooperation with new federal mandates.
They could—eventually—redirect financial flows.
Again, no state has done this. But the vacuum is real. And the constitutional ambiguity is growing.
️ What’s the Risk?
Some say this is a long-overdue return to states’ rights. Others see the seeds of fragmentation.
The federal government may retaliate. Through courts. Through funding cuts. Even through threats of federal occupation (however symbolic).
But if people in California, Oregon, and New York begin to feel they’re being governed without representation—or worse, punished for resisting—the pressure to act will rise.
Final Thought
This isn’t about policy anymore. It’s about the architecture of power.
Who decides what gets funded?
Who sets the terms of education?
Who controls the national purse?
We may be watching a soft unraveling. Not with flags and cannons—but with spreadsheets, injunctions, and ideological checklists.
The question is no longer: Can the federal government still lead?
The question is: Who will the states follow?
Citations and Relevant Links
- AP News. “Supreme Court Allows Trump Administration to Halt Teacher-Training Grants.” apnews.com, 4 Apr. 2025.
- Wall Street Journal. “Trump Can Cut Teacher Training Programs for Now, Supreme Court Says.” wsj.com, 4 Apr. 2025.
- Reuters. “U.S. Supreme Court Backs Trump’s Grant Cuts in DEI Crackdown.” reuters.com, 4 Apr. 2025.
- NPR. “Trump Administration Warns Schools about DEI Programs.” npr.org, 3 Apr. 2025.
- The Hill. “Trump Administration Threatens to Pull K-12 Funding for DEI Programs.” thehill.com, 3 Apr. 2025.
- White House. “Executive Order 14190 – Ending Radical Indoctrination in K–12 Schooling.” whitehouse.gov, 29 Jan. 2025.
- NPR. “DOGE Downsizing: Trump Administration Closes Federal Buildings across Blue States.” npr.org, 8 Mar. 2025.
- Newsweek. “Map Shows States with Most IRS Closures after DOGE Cuts.” newsweek.com, Mar. 2025.
- Politico. “GSA Ordered to Terminate Hundreds of Federal Building Leases under DOGE.” politico.com, 3 Mar. 2025.
- Supreme Court of the United States. “24A910 Department of Education v. California et al. Order.” supremecourt.gov, 4 Apr. 2025.
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