Trump administration threatens states welfare funds over illegal migrants

Trump administration threatens states welfare funds over illegal migrants
U.S. President Donald Trump speaks during a meeting with travel executives in the Oval Office at the White House in Washington, D.C., U.S., 2 September 2026.
Reuters

The U.S. Justice Department has warned states they could lose billions of dollars in welfare funding if they fail to report immigrants known to state agencies who are in the country illegally.

The warning, issued on Wednesday by the DOJ's Office of Legal Counsel, marks a significant expansion of the Trump administration's immigration enforcement efforts.

Under the new interpretation, states receiving funding for two major welfare programmes must report people unlawfully present in the U.S. to the Department of Homeland Security.

Previously, the requirement applied only to agencies directly administering the programmes. The new guidance could extend it to other state agencies that may have information about immigrants, including universities and departments of motor vehicles.

Deputy Assistant Attorney General Joshua Craddock said failure to comply could result in the loss of federal funding.

Billions at stake

The programmes include Temporary Assistance for Needy Families and Supplemental Security Income. Federal TANF grants exceed $16.5 billion a year, while federal SSI benefits total more than $60 billion.

Immigrants without legal status are not eligible for either programme.

The opinion is not law but is binding on federal agencies. It could face legal challenges from Democratic-led states, several of which have already challenged the administration's efforts to expand access to personal information held by state agencies.

At least 19 states and Washington, D.C., allow immigrants without lawful status to obtain driver's licences, while some state universities also admit such students, potentially giving state agencies access to information about millions of people without legal immigration status.

Read more: 

Tags