A coalition of 13 states, New York City and Washington DC are suing the Trump administration over new restrictions for food stamp benefits for unemployed Americans – a measure they say could disqualify nearly 700,000 from federal food assistance.

The new rule, introduced in December, would eliminate states’ discretion to waive work requirements in distressed economic areas, saving the federal government $5.5bn in spending over five years.

The lawsuit is the latest pushback by Democratic states against the Trump administration, as opponents criticize the president for what they say are proposed changes that target the poor, unemployed and those in large metropolitan areas.

In the suit, filed on Thursday, states say that by limiting their discretion, the new rule would actually terminate “essential food assistance for benefits recipients who live in areas with insufficient jobs”.

The coalition includes states like Oregon, Nevada, Minnesota and more areas hit hard by economic decline and job scarcity. The suit claims cuts to food stamps benefits, known as the Snap program, would burden states with new administrative and economic costs from “the negative health effects of malnutrition and instability”.

They argue the administration adopted the cuts despite no evidence of a need, or any research on current labor market conditions – potentially affecting 688,000 to 850,000 adults without children.

“States are in the best position to evaluate local economic circumstances and to determine where there are insufficient job opportunities such that work requirements would be ineffective,” the suit says.

In December, the agriculture secretary, Sonny Perdue, insisted the new restrictions would begin the “groundwork for the expectation that able-bodied Americans re-enter the workforce where there are currently more job openings than people to fill them”.

“We need to encourage people by giving them a helping hand but not allowing it to become an indefinitely giving hand,” he said.

New York’s attorney general, Letitia James, and the District of Columbia attorney general, Karl Racine, co-lead the lawsuit. In a statement, James said restrictions to Snap benefits would push “already vulnerable Americans into greater economic uncertainty”.

“The federal government’s latest assault on vulnerable individuals is cruel to its core,” he said.

The Snap program, first launched in 1977, uses federal dollars to provide millions of low-income Americans with food assistance, aimed at reducing food insecurity. States operate the program, splitting the cost of administering it with the federal government. The federal government pays the full cost of Snap benefits to recipients.

James adds that the restrictions will force states “to grapple with rising healthcare and homelessness costs” that could result from a “shortsighted and ill-conceived policy”.

The new restrictions were first announced as Trump signed the 2018 Farm Bill, a federal relief for distressed farmers, that included stricter work requirements. Those requirements were ultimately dropped.