Administration to Review Funding to Democratic States

The White House budget office has instructed most federal agencies to catalog all funding sent to a set of Democratic-led states and Washington, DC, as the Trump administration weighs ways to pressure jurisdictions that limit cooperation with federal immigration authorities. In a memo reviewed by the Washington Post, Politico, and the AP, the Office of Management and Budget ordered agencies—excluding the Defense and Veterans Affairs departments—to list every grant, loan, contract, subcontract, and other financial award provided to 14 states and the District of Columbia. The agencies were told to submit data by Jan. 28, including funding for state and local governments, nonprofits, and universities for fiscal 2025 and projected fiscal 2026.

The states are California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington. The governor of all the states but Vermont is a Democrat, per Politico. The list includes all of the fully Democratic-controlled states except Hawaii, Maryland, and New Mexico, per the AP. The memo frames the directive as a "data-gathering exercise" aimed at helping "reduce the improper and fraudulent use" of funds, saying it does not involve withholding money and "therefore does not violate any court order," per the Post. But the order follows President Trump's pledge that, starting Feb. 1, the federal government would stop payments to "sanctuary cities, or states having sanctuary cities," which he accused of protecting criminals.

Democrats said the review appears designed to lay groundwork for cutting off funding to political opponents. "I have zero doubt that they intend to withhold funds and they intend to punish people who have different views than they do," said Rep. Joe Morelle. OMB Director Russell Vought has previously taken steps against Democratic states that include an attempt during a government shutdown to cancel $8 billion in clean energy grants to 16 of them. A federal judge later ruled that unlawful, noting the administration "freely admit[ted]" it acted based largely on whether states had backed Trump in 2024. The administration also cited fraud concerns in hitting five Democratic states with a $10 billion cut to child care and social services funding. And it began slashing funding in October to states that voted for the Democratic presidential nominee in 2024.