Unpacking the Trump Administration's Funding Review

The Trump administration has initiated a review of federal funds distributed to over a dozen states governed by Democrats. This move is part of a broader strategy to scrutinize federal spending, particularly in states that did not support President Trump in the 2024 election.

Key Points

• OMB Directive: The Office of Management and Budget (OMB) has directed federal agencies (excluding the Department of Defense and Veterans Affairs) to provide detailed spending data.
• Targeted States: The review includes 13 states and Washington, D.C., all of which voted for former Vice President Kamala Harris in the 2024 election. Twelve of these states have Democratic governors.
• Additional State: A 14th state, Virginia, has since been added to the review.

Broader Context

• Escalation: This initiative marks a significant escalation in the administration's efforts to target federal funding in blue states.
• Motivation: The approach gained momentum during last year's government shutdown and has intensified following allegations of fraud in Minnesota.
• Key Figure: OMB Director Russel Vought has been instrumental in leveraging the agency's tools to exert greater control over federal spending.

Objectives

• Identify Waste: The review aims to identify potential waste or abuse in federal funding.
• Counter Policies: It also includes options to counter policies in blue states that conflict with the administration's priorities, such as funding for "sanctuary cities."

Legal Battles

• Health and Human Services: Earlier this month, the Department of Health and Human Services announced it would freeze $10 billion in federal childcare and social assistance funding to five Democratic-led states, citing potential fraud. The states quickly sued, arguing the move lacked evidence and would harm low-income families. A federal judge issued a temporary restraining order to keep the funds flowing.
• Department of Agriculture: A federal judge temporarily halted the Department of Agriculture's demand that Minnesota re-certify the eligibility of over 100,000 food stamp enrollees within 30 days. The agency cited a multimillion-dollar fraud scheme involving a USDA Covid-19 pandemic child nutrition relief program.
• Sanctuary Cities: President Trump has also vowed to cut off funding to sanctuary cities, a long-standing target of his administration. However, previous efforts to stop funding to these jurisdictions have been repeatedly halted by courts.

Deadline

Federal agencies have until Monday to provide the requested data on California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington state, and Washington, D.C.