In the wake of the Somali fraud scandal that rattled Minnesota, the Trump administration will soon order a sweeping whole-of-government review of all federal funding awarded to 13 Democrat-leaning states and the District of Columbia, RealClearPolitics is first to report.
It is perhaps the most aggressive budgetary colonoscopy since the creation of the Department of Government Efficiency and the deputization of Elon Musk last year to slash and burn his way through the federal government. Sources familiar with the effort tell RCP it signals the administration’s seriousness about getting to the bottom of waste, fraud, and abuse.
Government agencies have until the close of business next Wednesday to make their report to Russ Vought, the director of the Office of Business and Management.
The review comes as Trump vows to cut off all federal funding to sanctuary cities. “They do everything possible to protect criminals at the expense of American citizens. And it breeds fraud and crime and all of the other problems that come,” the president said last week during remarks to the Detroit Economic Club. “So we’re not making any payment to anybody that supports sanctuary cities.”
The Department of Health and Human Services already froze more than $10 billion in social services and childcare funding for a handful of blue states earlier this month over allegations that funds were fraudulently directed to non-citizens. The latest OMB action will likely dwarf that effort in size and scope. Every government agency, with the exception of the Department of War and the Department of Veterans Affairs, must complete the budget data request and detail all monies sent to a list of blue states.
The Trump administration will not just target grants and contracts for review. According to a budget data request obtained by RCP, the White House also wants comprehensive details on federal loans to the states. The administration is leaning on agencies across the government to answer for every dollar sent to states and localities, institutions of higher learning, and nonprofits.
The total is expected to be in the hundreds of billions of dollars. It will almost certainly draw the attention and ire of Democrats who accuse the president of unfairly targeting his political opponents. The stated purpose, according to documents obtained by RCP: “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.”
States that will soon be under Trump’s microscope include California, Colorado, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington, as well as the District of Columbia.
Each shares a similar profile: They all voted for former Vice President Kamala Harris over Trump in the last general election. With the exception of Vermont, all are led by Democratic governors.
Stephen Miller promised that the administration would root out fraud and funding for sanctuary cities. “We are not going to, as a country, subsidize mass immigration, mass criminal activity, and mass theft of American taxpayer resources by people who have no right to be here,” the deputy White House chief of staff told Laura Ingraham of Fox News last Tuesday.
Miller said that Vought would quarterback the operation, a fact that an administration source says reflects the seriousness of the effort. The soft-spoken OMB chief has a long knife and is known for his appetite for slashing spending.
Trump has been on a collision course with Democratic governors since returning to office. When HHS froze grants earlier this month, New York Gov. Kathy Hochul promised to take the administration to court. “This is a fight we’re going to have to take on if we get that notification,” Hochul told reporters of the “vindictive” action Trump was taking.
“I believe that we’ll be successful in court,” she added. “We’ll fight this with every fiber of our being because our kids should not be political pawns in a fight that Donald Trump seems to have with Blue State Governors.”
While Minnesota captured the attention of the nation after a viral YouTube video by citizen journalist Nick Shirley detailed billions in allegedly fraudulent payments made to Somali daycares in that state, fiscal hawks insist it is just the tip of the iceberg. California and New York, they insist, are the bigger prizes where fraud abounds.
There is a notable exclusion from the list of states that OMB will target for review. It does not include Virginia, where newly minted Gov. Abigail Spanberger signed an executive order laying the groundwork for her state to end its cooperative relationship with Immigration and Customs Enforcement.
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