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The Office of Management and Budget (OMB) said it will focus on projects at the Department of Transportation (DOT) and the Centers for Disease Control and Prevention (CDC), cutting $943 million and $602 million, respectively.
This is what a spokesperson for the OMB says New York Post that the states were targeted because of “waste and mismanagement” of taxpayer dollars.
The announcement follows OMB’s launch of a major overhaul of federal funding for several Democratic-led states in January, requiring states to submit detailed receipts showing no money had been misused, CBS News reported.
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The initiative reflects a shift in fiscal policy toward “America First” priorities, by withholding money from states that implement sanctuary policies or projects the administration considers wasteful.
The concerns cited include tax aid for illegal immigrants, green initiatives and alleged fraud in certain states, such as the $250 million COVID-era scam in Minnesota exposed in the Feeding Our Future case.
Several DOT and CDC programs in blue states could be affected by the cuts, including equity-focused infrastructure projects and public health initiatives that OMB previously criticized as “social engineering” rather than legitimate public health efforts.
“Using federal resources to advance Marxist equality, transgenderism, and social engineering policies of the Green New Deal is a waste of taxpayer dollars that does not improve the daily lives of those we serve,” the 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 states over concerns about funding abuse. (Al Drago/Bloomberg via Getty Images/Getty Images)
In January, Trump cut more than $10 billion in federal funding for child care and social services to four states, as well as New York, over concerns that some benefits had been fraudulently diverted to non-residents, the Post said. reported.
In California, San Francisco would receive $15 million to expand its electric vehicle charging network, focusing on “underserved communities marginalized by underinvestment and overburdened by pollution,” city officials said in 2025.
Similarly, the California Reducing Disparities Project, an equity-focused public health program serving marginalized communities, including racial minorities and LGBTQ+ populations, received $60 million over six years.
Chicago has drawn attention to its initiatives focused on diversity, equity and inclusion.
The Biden-era Red Line extension and the Red and Purple Modernization programs, which together amount to about $2.1 billion, were paused in 2025 pending a review of race-based contracting practices.
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CDC research may be subject to potential budget cuts. (Nathan Posner/Anadolu Agency via Getty Images/Getty Images)
In addition, funding for CDC research into sexually transmitted diseases that affect “adolescents and young adults, homosexuals, bisexuals, and other men who have sex with men” could potentially be cut. The project, which listed Chicago as a recipient, could receive $7 million, The Post reported.
In October 2025, the Trump administration labeled federal funding for several climate and renewable energy initiatives a “Green New Scam” and subsequently ended or paused $7 billion in subsidies, with Colorado among the key states affected, according to local media. CPR News.
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The Trump administration could expand subsidy withdrawals in the future due to concerns about systemic failures in sanctuary city leadership that surfaced prominently after Minnesota’s fraud schemes.
