Trump Administration Orders Massive Review of Federal Funding for Blue States

The Office of Management and Budget this week directed nearly every federal agency to review its funding for 14 Democratic-led states as President Donald Trump ramps up his threats against “sanctuary cities.”

In a memo sent Tuesday, first reported by RealClearPolitics and confirmed by NOTUS, OMB declared that every federal agency, except the Departments of Veterans Affairs and Defense, must comply with the sweeping review.

“This information will be used to better understand the scope of funding in certain States and localities in order to facilitate efforts to reduce the improper and fraudulent use of those funds through administrative means or legislative proposals to Congress,” OMB wrote in the memo.

The memo added that it was a “data-gathering exercise” and “does not involve withholding funds, and therefore does not violate any court order,” an apparent reference to the federal judge last week who declared that targeting Democratic states for funding cuts violated the 14th Amendment’s Equal Protection Clause.

In a separate case, Democratic attorneys general from New York, Minnesota, Colorado, California and Illinois filed a lawsuit against the Trump administration earlier this month asking for the reversal of a $10 billion freeze on welfare funding. The Health Department argued the states, all of which are home to so-called sanctuary cities, have been “allowing massive amounts of fraud to occur under their watch.”

A federal judge ruled on Jan. 9 that this funding freeze was illegal. Some agencies, including the U.S. Department of Agriculture, began reversing their prior cancellations this week.

The OMB memo also comes after the Trump administration said it would withhold $130 million in federal welfare funds from Minnesota because of local officials’ “failed leadership and abysmal financial management oversight.” The Trump administration has used a viral controversy stemming from a massive spate of alleged state welfare fraud as its reasoning for increased oversight and ramped-up immigration enforcement in Minneapolis. More than 50 individuals from Minnesota, many of them Somali nationals, have been accused of stealing billions in taxpayer funds distributed during the COVID-19 pandemic for social programs.

Speaking to reporters from the White House briefing room before departing for Davos, Switzerland, Trump said he is no longer providing funds to states that contain “sanctuary cities,” regardless of their success in court.

“You got to get rid of your sanctuary cities,” Trump said Tuesday. “And I hope our people know that we’re not going to pay sanctuary cities, we’re not going to pay them anymore. They can sue us, and maybe they’ll win, but we’re not giving money to sanctuary cities anymore.”