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The Trump administration has ordered Cabinet agencies to review federal funding flowing to a group of Democratic-controlled states and Washington, D.C., a move that has raised alarms among Democrats who fear the information will be used to cut off resources to so-called “sanctuary” jurisdictions that limit cooperation with federal immigration authorities.
According to a White House budget official and records reviewed by The Washington Post, the Office of Management and Budget directed nearly all federal agencies — excluding the Defense and Veterans Affairs departments — to report every grant, loan, contract, subcontract and other form of federal financial assistance sent to 14 states and the District of Columbia.
The memo, sent Monday and requiring agencies to report back by Jan. 28, says the request is intended to “facilitate efforts to reduce the improper and fraudulent use of those funds through administrative means or legislative proposals to Congress.”
“This is a data-gathering exercise only,” the memo states. “It does not involve withholding funds and therefore does not violate any court order.”
Sanctuary funding threat looms
The order comes days after President Donald Trump declared that, beginning Feb. 1, the federal government would halt “any payments to sanctuary cities, or states having sanctuary cities,” accusing such jurisdictions of protecting criminals “at the expense of American citizens.”
The administration has recently escalated immigration enforcement in Minneapolis, where federal prosecutors are scrutinizing nonprofit organizations that have received federal grants. Many of those groups are affiliated with the city’s large Somali community. Trump has cited the investigations to justify a broader crackdown on both immigration from East Africa and alleged federal benefits fraud.
During remarks Wednesday at the World Economic Forum in Davos, Switzerland, Trump referred to the investigation’s targets as “Somalian bandits,” drawing criticism from civil rights advocates.
“We are moving forward with taking fraud seriously,” an OMB spokesperson said, speaking on condition of anonymity to discuss internal deliberations.
Democrats see a pretext for cuts
Democrats in Congress said they do not trust the administration’s assurances that the funding review is merely informational.
“OMB has no goodwill. They never say what they mean. They never mean what they say,” Rep. Joe Morelle of New York, the No. 2 Democrat on the House Appropriations Committee, told The Post. “I have zero doubt that they intend to withhold funds and they intend to punish people who have different views than they do.”
The jurisdictions included in the review are California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia and Washington state, as well as the District of Columbia.
Agencies were instructed to provide detailed information on funds distributed in fiscal year 2025 and projected spending for fiscal year 2026, including money directed to state and local governments, nonprofit organizations and colleges and universities.
Legal history raises stakes
OMB Director Russell Vought has previously clashed with Democratic-led states over federal funding.
During last fall’s 43-day government shutdown, Vought attempted to cancel roughly $8 billion in clean energy grants to 16 Democratic-run states. A federal judge ruled earlier this month that the move was unlawful and ordered the funds restored.
“Defendants freely admit that they made grant-termination decisions primarily — if not exclusively — based on whether the awardee resided in a state whose citizens voted for President Trump in 2024,” U.S. District Judge Amit P. Mehta wrote in the ruling.
Vought’s office has also paused billions of dollars for New York City subway and rail projects, drawing sharp criticism from Democratic leaders representing the state, including Senate Majority Leader Charles E. Schumer and House Minority Leader Hakeem Jeffries.
Court battles likely
Top Democratic appropriators said they expect any attempt to withhold funds based on immigration policies to be challenged in court.
“We have to fight it in the courts,” Rep. Rosa DeLauro of Connecticut, the ranking Democrat on the House Appropriations Committee, told The Post. “Because it is all illegal, and the courts have shown they’re not going to tolerate the disregard for the law.”
Whether the administration ultimately moves beyond data collection remains unclear, but Democrats say the memo signals another looming legal showdown over the limits of presidential power and federal spending authority.
