The Obama administration announced on Thursday that it would not attempt to strip federal education funding from North Carolina over a bathroom regulation it says violates federal nondiscrimination law.
White House Press Secretary Josh Earnest said an inter-agency evaluation advised against stripping millions of federal education dollars from the state while a federal lawsuit is playing out in court.
“What has been concluded as a result of that effort is that the administration will not take action to withhold funding while this enforcement process is playing out in the courts,” Mr. Earnest said.
North Carolina and the U.S. Department of Justice sued each other on Monday over a law that regulates public bathroom access by sex.
The agency said the law discriminates against transgender people, who wish to use facilities on the basis of gender identity, and violates three federal laws barring sex discrimination.
Attorney General Loretta E. Lynch on Monday said DOJ was deliberating whether to withhold federal education dollars from North Carolina.
She compared the statute to Jim Crow race codes adopted after the Civil War.
President Obama has said the law is “wrong and should be overturned.”