

It’s not saying the states are acting capriciously or even unreasonably, it’s just that the system would treat it as such
The system would declare the proper remediation is the states suing for their funds and having the justice system fix it. If the justice system so orders the dispersement and federal gov refuses to pay out, then I could imagine the settlement terms permitting the state to deduct owed funds from their payments. If the justice system fails to rule appropriately, then the state doesn’t have legal recourse, but it may still make sense to take their recourse anyway.
I think this is a discussion about what the hypothetical ‘legal’ way for this to go down would be. It’s not really an assertion that it would actually work, but just a description of what the process would be.
This has deviated from “would such a move be justified?” to “how could such a move be legally pursued?”. It may still end in the same place, but we can’t pretend the courts would treat the “just stop paying without a judgement” as “legal”. Might proceed in an illegal fashion as the only reasonable way through though.