In laying out its justification for canceling the program, the Interior Department noted that the states were "set to receive additional benefits from the payout of the $20.8 billion BP oil spill settlement agreement."
In response, the Democratic governor of Louisiana on Tuesday said the Washington budget plan "robs Louisiana" of promised funds for coastal restoration.
Those funds, said John Bel Edwards, are "already appropriated in the Fiscal Year 2018 budget toward critical projects that address coastal restoration and hurricane protection, but are not eligible for funding under the settlement agreement from the Deepwater Horizon oil spill."
The Interior Department further argued that the four states receive a share of revenue from oil and gas production under another law, the Outer Continental Shelf Lands Act. Those payments have totaled $279.1 million over the seven years GOMESA has been making disbursements.
President Barack Obama proposed funneling royalties to programs that protect natural resources. The House of Representatives last year adopted an amendment from Byrne, the Alabama congressman, that blocked the move.
"We have successfully pushed back in the past against efforts by the Obama administration to alter this program, and I expect we will do the same this year," Byrne told CNBC. "This money belongs on the Gulf Coast."