Trump Administration Axes $1.5 Billion in Federal Grants for Blue States

The Trump administration’s budget office announced on Wednesday that it is canceling $1.5 billion in grants aimed at blue states, specifically targeting California, Colorado, Illinois, and Minnesota. This decision stems from concerns regarding the management of these funds.

The Office of Management and Budget (OMB) revealed that it will cut $943 million from the Department of Transportation (DOT) and $602 million from the Centers for Disease Control and Prevention (CDC). An OMB spokesperson informed the New York Post that these states were selected due to “waste and mismanagement” of taxpayer funds.

This announcement follows a comprehensive review initiated by the OMB in January, which required states to provide detailed receipts to prove that no funds were being mishandled, as reported by CBS News here.

TRUMP’S ENERGY DEPARTMENT AXES BIDEN-ERA PROJECTS, SAVING TAXPAYERS $7.56B

The Office of Management and Budget is planning to cancel over $1 billion in grants from the Department of Transportation (DOT) and the Centers for Disease Control and Prevention (CDC). (Stephen Goin / Fox News)

This initiative marks a significant shift in fiscal policy, emphasizing “America First” priorities by withholding funds from states that maintain sanctuary policies or engage in projects deemed wasteful. Concerns raised include taxpayer support for illegal immigrants, green initiatives, and allegations of fraud, such as the $250 million COVID-era scam in Minnesota uncovered in the “Feeding Our Future” case.

Several DOT and CDC programs in blue states are likely to be impacted by these funding cuts, including equity-focused infrastructure projects and public health initiatives that the OMB has previously criticized as “social engineering” rather than legitimate public health efforts. In 2025, the OMB stated, “The use of Federal resources to advance Marxist equity, transgenderism, and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

TREASURY SECRETARY ANNOUNCES CASH REWARDS FOR MINNESOTA FRAUD WHISTLEBLOWERS

The Trump administration’s budget office is canceling $1.5 billion in funding for DOT and CDC projects in four blue states over funding misuse concerns. (Al Drago/Bloomberg via Getty Images / Getty Images)

In January, Trump halted over $10 billion in federal childcare and social services funding to four states, including New York, due to concerns that some benefits had been fraudulently funneled to noncitizens, as reported by the Post here.

In California, San Francisco was set to receive $15 million to expand its electric vehicle charging network, focusing on “disadvantaged communities that are marginalized by underinvestment and overburdened by pollution,” according to city officials in 2025. Similarly, the California Reducing Disparities Project, an equity-focused public health program, was awarded $60 million over six years to serve marginalized communities, including racial minorities and LGBTQ+ populations.

Chicago has drawn scrutiny for its diversity, equity, and inclusion initiatives. The Biden-era Red Line Extension and the Red and Purple Modernization Programs, totaling approximately $2.1 billion, were paused in 2025 pending a review of “race-based contracting” practices.

DEMS’ DHS SHUTDOWN THREAT WOULD HIT FEMA, TSA WHILE IMMIGRATION FUNDING REMAINS INTACT

CDC research may be subject to potential cuts. (Nathan Posner/Anadolu Agency via Getty Images / Getty Images)

Additionally, funding for CDC research on sexually transmitted diseases affecting “adolescents and young adults, gay, bisexual, and other men who have sex with men” may also face cuts. This project, which included Chicago as a recipient, was set to receive $7 million, according to reports.

In October 2025, the Trump administration labeled federal funding for various climate and renewable energy initiatives as a “Green New Scam,” leading to the termination or pause of $7 billion in grants, with Colorado being one of the states most affected, as reported by local media CPR News.

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The Trump administration may consider further grant cancellations in the future, particularly amid concerns about systemic failures in sanctuary city leadership, which have gained attention following the fraud schemes in Minnesota.

The governors of California, Colorado, Illinois, and Minnesota have not yet responded to FOX Business’ request for comment.

Fox News Digital’s Greg Norman contributed to this report.

The Trump administration’s budget office announced on Wednesday that it is canceling $1.5 billion in grants aimed at blue states, specifically targeting California, Colorado, Illinois, and Minnesota. This decision stems from concerns regarding the management of these funds.

The Office of Management and Budget (OMB) revealed that it will cut $943 million from the Department of Transportation (DOT) and $602 million from the Centers for Disease Control and Prevention (CDC). An OMB spokesperson informed the New York Post that these states were selected due to “waste and mismanagement” of taxpayer funds.

This announcement follows a comprehensive review initiated by the OMB in January, which required states to provide detailed receipts to prove that no funds were being mishandled, as reported by CBS News here.

TRUMP’S ENERGY DEPARTMENT AXES BIDEN-ERA PROJECTS, SAVING TAXPAYERS $7.56B

The Office of Management and Budget is planning to cancel over $1 billion in grants from the Department of Transportation (DOT) and the Centers for Disease Control and Prevention (CDC). (Stephen Goin / Fox News)

This initiative marks a significant shift in fiscal policy, emphasizing “America First” priorities by withholding funds from states that maintain sanctuary policies or engage in projects deemed wasteful. Concerns raised include taxpayer support for illegal immigrants, green initiatives, and allegations of fraud, such as the $250 million COVID-era scam in Minnesota uncovered in the “Feeding Our Future” case.

Several DOT and CDC programs in blue states are likely to be impacted by these funding cuts, including equity-focused infrastructure projects and public health initiatives that the OMB has previously criticized as “social engineering” rather than legitimate public health efforts. In 2025, the OMB stated, “The use of Federal resources to advance Marxist equity, transgenderism, and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

TREASURY SECRETARY ANNOUNCES CASH REWARDS FOR MINNESOTA FRAUD WHISTLEBLOWERS

The Trump administration’s budget office is canceling $1.5 billion in funding for DOT and CDC projects in four blue states over funding misuse concerns. (Al Drago/Bloomberg via Getty Images / Getty Images)

In January, Trump halted over $10 billion in federal childcare and social services funding to four states, including New York, due to concerns that some benefits had been fraudulently funneled to noncitizens, as reported by the Post here.

In California, San Francisco was set to receive $15 million to expand its electric vehicle charging network, focusing on “disadvantaged communities that are marginalized by underinvestment and overburdened by pollution,” according to city officials in 2025. Similarly, the California Reducing Disparities Project, an equity-focused public health program, was awarded $60 million over six years to serve marginalized communities, including racial minorities and LGBTQ+ populations.

Chicago has drawn scrutiny for its diversity, equity, and inclusion initiatives. The Biden-era Red Line Extension and the Red and Purple Modernization Programs, totaling approximately $2.1 billion, were paused in 2025 pending a review of “race-based contracting” practices.

DEMS’ DHS SHUTDOWN THREAT WOULD HIT FEMA, TSA WHILE IMMIGRATION FUNDING REMAINS INTACT

CDC research may be subject to potential cuts. (Nathan Posner/Anadolu Agency via Getty Images / Getty Images)

Additionally, funding for CDC research on sexually transmitted diseases affecting “adolescents and young adults, gay, bisexual, and other men who have sex with men” may also face cuts. This project, which included Chicago as a recipient, was set to receive $7 million, according to reports.

In October 2025, the Trump administration labeled federal funding for various climate and renewable energy initiatives as a “Green New Scam,” leading to the termination or pause of $7 billion in grants, with Colorado being one of the states most affected, as reported by local media CPR News.

CLICK HERE TO DOWNLOAD THE FOX NEWS APP

The Trump administration may consider further grant cancellations in the future, particularly amid concerns about systemic failures in sanctuary city leadership, which have gained attention following the fraud schemes in Minnesota.

The governors of California, Colorado, Illinois, and Minnesota have not yet responded to FOX Business’ request for comment.

Fox News Digital’s Greg Norman contributed to this report.