President Trump Declares End of $2.75 Billion Digital Equity Act Programs
- On May 9, President Donald Trump declared the Digital Equity Act unconstitutional and announced that he would be immediately “ending” the programs created under the law.
- President Trump provided no details on how he would implement the cancellation, including whether he would seek congressional approval for a budget rescission.
- The attempt to cancel the Digital Equity Act programs will likely lead to intense lobbying and litigation over the future of the programs and the $2.75 billion Congress had appropriated.
President Trump’s Statement & Award Termination Letters
On May 8, 2025, President Donald Trump declared in a post on his Truth Social platform that the Digital Equity Act was unconstitutional and that he would be ending the "Digital Equity Program" immediately. The President specifically called out the program’s “woke handouts based on race,” and stated that the program is an “ILLEGAL $2.5 BILLION DOLLAR GIVEAWAY.” He also shared that Commerce Secretary Howard Lutnick agreed that the law is unconstitutional.
The Digital Equity Act provides for $2.75 billion for grants through three separate digital equity programs administered by the Department of Commerce’s National Telecommunications and Information Administration (NTIA): The State Digital Equity Planning Grant Program (DE State Planning Program), the State Digital Equity Capacity Grant Program (DE Capacity Program) and the Digital Equity Competitive Grant Program (DE Competitive Program).
We understand that the Department of Commerce plans to cancel at least the DE Capacity Program and DE Competitive Program, although it is unclear whether they will try to claw back funds for the DE State Planning Program. According to news reports, the Department of Commerce notified awardees in the DE Competitive Program that it was canceling their award. The letter indicated that the agency was canceling the award because “grants issued pursuant to [the Digital Equity Act] were created with, and administered using, impermissible and unconstitutional racial preferences.” The letter also cited a federal regulation that allows agencies to terminate financial assistance awards based on a change in agency policy goals. We also understand that states received similar letters notifying them of the cancellation of their DE Capacity Program awards.
The Digital Equity Act
Enacted under the Infrastructure Investment and Jobs Act, the Digital Equity Act established and funded three separate grant programs:
- The DE State Planning Program, a $60 million formula grant program for states, territories and Native Entities to develop state and tribal digital equity plans.
- The DE Capacity Program, a $1.44 billion formula grant program for states, territories and Native Entities to implement their state digital equity plans.
- The DE Competitive Program, a $1.25 billion competitive program under which NTIA can issue grants to support digital equity activities consistent with the Digital Equity Act.
In November 2024, then-Ranking Member of the Senate Commerce Committee Ted Cruz (R-TX) sent a letter to NTIA alleging that the Digital Equity Competitive Grant Program is unconstitutional. According to Cruz, the provision of the law that allows racial minorities to be included as a “covered population” eligible for Digital Equity Competitive Grant Program funding violates the Constitution’s Fifth Amendment. Notably, the Digital Equity Act does not include a similar provision for the other two digital equity programs, and Cruz did not allege that either of those programs were unconstitutional.
Key Open Question: How Does President Trump Plan to Implement the Cancellation?
The President’s announcement leaves open the question of whether he will formally recommend to Congress a recission of any unspent digital equity funding. As a general matter, the Impoundment Control Act of 1974 (ICA) establishes procedures for the President to follow when seeking to withhold appropriated funds. Under that ICA, the President may send a special message to Congress identifying funds he proposes to rescind. If the President does recommend to Congress a recission, it will likely kick off a lobbying sprint over the fate of those funds. A message under the ICA is subject to expedited procedures in both the House and Senate, and if Congress does not ultimately approve the proposal within a specified time frame (i.e., 45 days of continuous session after receipt of the message), the funds must be spent as originally appropriated by Congress.
If the President does not seek congressional approval for a recission and instead attempts to cancel the program(s) through executive branch action, it will likely lead to litigation over the executive branch’s ability to do so. And regardless of whether the President seeks a congressional rescission or not, grantees may bring reliance litigation against the federal government for expenses they incurred in reliance on their digital equity awards.
The Akin team will be monitoring this space closely. Please do not hesitate to reach out with any questions.
