A Program Declared Dead, Revived With One Clause Removed
On July 15, 2026, Judge John D. Bates of the U.S. District Court for the District of Columbia handed down a ruling in National Digital Inclusion Alliance v. Trump (Civil Action No. 25-3606) that validates two competing complaints at once. He agreed with the administration that a piece of the Digital Equity Act of 2021 is unconstitutional. And he agreed with the plaintiffs that the administration had no authority to kill the entire $2.75 billion program by press release.
Both things are true, and the distinction matters more than the headlines suggest.
What Actually Got Struck Down
The Digital Equity Act, enacted as part of the Infrastructure Investment and Jobs Act of 2021 (Pub. L. 117-58, Sections 60301-60307), created three grant programs worth $2.75 billion: a $1.44 billion State Capacity program, a $60 million State Planning program, and a $1.25 billion Competitive Grant Program aimed at nonprofits and community groups. Eligibility ran through eight "covered populations" written directly into the statute — low-income households, aging individuals, incarcerated people outside federal facilities, veterans, people with disabilities, people with language barriers, rural residents, and, critically, "individuals who are members of a racial or ethnic minority group."
That last category is what Bates struck down. Applying the strict-scrutiny framework the Supreme Court set out in Students for Fair Admissions v. Harvard (2023), the court held that a categorical racial classification embedded in a federal grant statute cannot survive constitutional review absent the kind of narrow tailoring the government made no serious attempt to demonstrate. But Bates then did something the administration apparently didn't expect: he severed the clause rather than voiding the statute. The other seven covered populations remain fully operative, and the court ordered the program back into motion.
The Bigger Problem Was Never the Statute
Steelman the administration's underlying legal instinct for a moment: post-SFFA, race-conscious eligibility criteria written into federal law are a live constitutional target, and agency counsel should have flagged the Digital Equity Act's language the moment the ink dried in 2023. If Congress wants durable, litigation-resistant broadband subsidies, race-neutral proxies — income, geography, disability status — already capture the overwhelming majority of the intended beneficiaries without inviting a strict-scrutiny challenge that can freeze disbursement for over a year.
But that legitimate objection to one clause is not what happened here. On May 8, 2025, President Trump announced on Truth Social that he was ending what he called an "ILLEGAL $2.5 BILLION DOLLAR GIVEAWAY," and the next day NTIA sent termination letters halting all three programs — not just the racially defined competitive tranche. Money Congress had already appropriated, obligated, and in some cases awarded (the National Digital Inclusion Alliance itself had a roughly $25 million, five-year award notice dated January 6, 2025 that was never paid out) simply stopped moving, by social-media announcement rather than through litigation, formal rescission, or renewed legislation.
That is an impoundment problem, not a civil-rights problem, and it's the more consequential one. The Constitution gives Congress the power of the purse; an administration that disagrees with a statute's eligibility language has an obvious remedy — challenge the specific clause, as the government eventually did here — not a unilateral freeze of every dollar the law authorizes. Judge Bates' order effectively told the government: you were right about one sentence, and now you have to actually win that argument in court instead of declaring victory on social media.
Fourteen Months, Not Zero
The practical cost of getting the sequencing backwards is measured in time. States that had built digital-navigator programs, adopted digital equity plans, and lined up subgrantees around the original grant terms lost roughly fourteen months of implementation runway between the May 2025 termination and this month's ruling — a delay Benton Institute director Revati Prasad pointed to directly, warning it has meant "fewer digital navigators supporting seniors." NTIA has now told the court it will reinstate the Competitive Grant Program, and both sides are due to file a joint status report by August 1, 2026 proposing next steps. Public Knowledge's legal director John Bergmayer put the institutional stakes plainly: "a president cannot ignore a law simply because he disagrees with it."
The Right Fix Was Always Legislative
None of this settles the underlying policy debate. More than twenty states have a separate suit pending over the same terminations, and NDIA's own $25 million award remains unresolved pending further proceedings. But the sequence Bates imposed — sever the flawed clause, keep the rest of the program running — is the model both branches should have reached for from the start. Congress, not a social-media post and not a district court, is the right venue to rewrite eligibility criteria that can't survive strict scrutiny. Until it does, agencies that want to shut down a program they dislike should challenge the specific defect in court, not treat every appropriated dollar as optional the moment part of their argument might eventually prevail.