The Trump administration has reached a settlement with the American Library Association and a union of cultural workers, bringing to an end its yearlong effort to dismantle the Institute of Museum and Library Services, a federal agency.
The settlement, reached by the Justice Department last week, affirms that the agency will continue issuing grants and operating its programs, which provide support to institutions in every state and territory. The Trump administration reaffirmed that it had reinstated all previously canceled grants, in keeping with a separate legal ruling last year, and reversed all staff reductions. It also promised not to take any further steps to reduce the agency.
Sam Helmick, the president of the American Library Association, said the threats had set off “a chain reaction” of cuts in services and called the settlement a victory for “every American’s freedom to read and learn.”
“This settlement protects life-changing library services for communities across the country,” Helmick said.
The Institute of Museum and Library Services did not immediately respond to a request for comment. The settlement agreement says that the Trump administration officials who were sued “reject the allegations” made in the complaint and “maintain that all of I.M.L.S.’s restructuring actions” were lawful.
The fate of the agency, which has a budget of roughly $290 million, had been uncertain since March 2025, when President Donald Trump issued an executive order calling for its elimination. The administration installed Keith E. Sonderling, the deputy secretary of labor, as acting director. The agency then began moving to lay off its roughly 70 employees and cancel previously approved grants.
The American Library Association, a nonprofit that promotes libraries, and the American Federation of State, County and Municipal Employees filed a lawsuit arguing that the cuts violated the Constitution and federal law by usurping Congress’ authority over how federal funds are spent.
The attorneys general of 21 states filed a separate lawsuit challenging the cuts. A judge ruled in their favor in November, and this month the Trump administration dropped its appeal.
The Institute of Museum and Library Services, created in 1996 and reauthorized in 2018 in legislation signed by Trump, provides funding to libraries, museums and other cultural institutions. Its budget for the 2026 fiscal year was roughly $290 million, similar to recent years.
By law, roughly $160 million of its funding is funneled directly to state library agencies, many of which rely on it for a third to half of their budgets.
Trump’s proposed budget for the 2027 fiscal year does not include any funding for the agency. He also repeatedly proposed zeroing out its budget in his first term, but Congress continued to fund it.
The settlement comes as the agency continues to pivot to Trump’s broader cultural agenda of promoting what he describes as patriotic history. This year, potential grant applicants were informed in a letter that projects should honor the 250th anniversary of American independence by helping “teach citizens about what makes our country the greatest in the world.”
© 2026 The New York Times Company