The Trump administration canceled $1.5 billion in blue-chip federal grants
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The Trump administration’s budget office told FOX Business on Wednesday that it is canceling $1.5 billion in federal grants, citing concerns about how the funds are being managed in California, Colorado, Illinois and Minnesota.
The Office of Management and Budget (OMB) said it will direct the projects to the Department of Transportation (DOT) and the Centers for Disease Control and Prevention (CDC), earmarking $943 million and $602 million, respectively.
An OMB spokesperson told the New York Post that the states were targeted for “waste and mismanagement” of taxpayer funds.
The announcement follows the OMB launching a comprehensive review of federal funds in several Democratic-led states in January, which required states to submit detailed receipts proving no funds were mishandled, CBS News reported.
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The Office of Management and Budget plans to cancel more than $1 billion in grants from the Department of Transportation (DOT) and the Centers for Disease Control and Prevention (CDC). (Stephen Goin/Fox News)
The plan reflects a shift in fiscal policy toward “America First” priorities by withholding funds from states that maintain sanctuary policies or projects that the administration deems wasteful.
Concerns cited include tax subsidies for illegal immigrants, green efforts and alleged fraud in certain states, such as a $250 million COVID-19 scam in Minnesota exposed in the “Feeding Our Future” case.
Many DOT and CDC programs in green states could be affected by the funding cuts, including equity-focused infrastructure projects and public health programs that OMB previously criticized as “social engineering” rather than legitimate public health efforts.
“The use of Federal resources to advance Marxist equality, transgenderism, and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the daily lives of those we serve,” OMB said earlier in 2025.
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The Trump administration’s budget office is canceling $1.5 billion in funding for DOT and CDC projects in four blue-state states because of funding abuses. (Al Drago/Bloomberg via Getty Images/Getty Images)
In January, Trump froze more than $10 billion in child care and social services in four states, as well as New York, due to concerns that some benefits were being illegally sent to homeless people, The Post reported. report.
In California, San Francisco was supposed to get $15 million to expand its electric car charging network, focusing on “disadvantaged communities marginalized by underinvestment and burdened by pollution,” city officials said by 2025.
Similarly, the California Reducing Disparities Project, an equity-focused public health program serving underserved communities, including ethnic minorities and LGBTQ+, was awarded $60 million over six years.
Chicago has drawn scrutiny for its efforts focused on diversity, equity and inclusion.
Biden’s red-line extension and the Red and Purple Modernization Programs, which together cost about $2.1 billion, were temporarily suspended through 2025 pending a review of “race-based contracting” procedures.
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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, homosexuals, bisexuals, and other men who have sex with men” could be subject to potential cuts. The project, which listed Chicago as the recipient, was on track to receive $7 million, The Post reported.
In October 2025, the Trump administration called federal funding for various climate and renewable energy programs the “Green New Scam” and subsequently cut or suspended 7 billion dollars in grants, Colorado being among the most affected states, according to local media. CPR news.
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The Trump administration may increase grant cancellations in the future amid concerns about systemic failures in sanctuary city leadership, which have come to light following the Minnesota fraud programs.
The governors of California, Colorado, Illinois and Minnesota did not immediately respond to FOX Business’ request for comment.
Fox News Digital’s Greg Norman contributed to this report.
