kqed.org · September 8, 2026
Trump Administration Threatens Billions in State Welfare Funding | KQED
# Trump Administration Threatens Billions in State Welfare Funding
The administration says states won't get funding unless they report known unauthorized immigrants to federal authorities, a move that could affect more than a million California residents.
Sep 8, 2026
Tyche Hendricks
Immigration and Customs Enforcement agents walk a detainee out of the Ventura County Government Center in Ventura, California, on July 27, 2026. (Blake Fagan/AFP via Getty Images)
California is at risk of losing nearly $12 billion in federal funding for public assistance programs after the Trump administration threatened to cut off grants to states unless they report every known unauthorized immigrant to immigration authorities.
The threat came in the form of a new legal opinion this month reinterpreting a 1990s welfare-reform law to mean that all agencies in states receiving welfare funding — which is every state in the nation — must report all “individuals known to be not lawfully present” to the federal government or risk losing grants that aid low-income people.
That’s a dramatic reversal from the Clinton-era interpretation of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, which said that only state agencies administering the Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) programs needed to provide information to federal immigration authorities.
Gov. Gavin Newsom’s office was defiant in its opposition to the threat.
Gov. Gavin Newsom speaks during a press conference at the Friendship House Association of American Indians in San Francisco on Jan. 16, 2026. (Beth LaBerge/KQED)
“This is nothing new — Trump has always tried to play cruel games with states that protect working families,” Newsom spokesperson Diana Crofts-Pelayo said. “The courts have repeatedly rejected the Trump administration’s politically motivated attacks on blue states — should the Trump administration move forward, we expect the same here.”
TANF — known in California as CalWORKS — is short-term cash assistance for people in poverty, including nearly 900,000 Californians as of 2024. SSI provides cash benefits to elderly, blind or disabled people with low incomes, including 1.1 million Californians as of 2025. That’s roughly 2 million Californians benefitted from the two programs.
California receives a $3.7 billion annual block grant for TANF and roughly $8 billion a year in SSI funding, according to Ryan Woolsey, a policy analyst at the state Legislative Analyst’s Office.
The Trump administration said it believes Congress intended for every state agency to report unauthorized immigrants to the U.S. Department of Homeland Security. And officials suggested that those immigrants were benefiting from the welfare programs.
“When a state chooses to participate in TANF, it accepts the obligation to report illegal aliens in the United States,” Assistant Attorney General T. Elliot Gaiser of the Justice Department’s Office of Legal Counsel said in a statement. “Tax dollars intended to help vulnerable Americans should not perversely encourage illegal entry into the United States, but rather should reinforce our laws and our borders.”
In fact, people who are not lawfully present in the U.S. are not eligible for either program.
If California were to comply with the new federal requirements, however, it would spotlight for federal immigration enforcement many of the estimated 2.6 million people in the state without legal status, including those who have lived in the U.S. for years and have U.S. citizen children.
California has information on a lot of residents without legal immigration status because, over the past two decades, lawmakers have made them eligible for public resources, including driver’s licenses, emergency health care and in-state tuition, UC Davis law professor Kevin Johnson said.
“The risk is bigger in California because California has been willing, in exercising its legislative judgment, to provide more services and benefits to undocumented immigrants than many other states,” Johnson said. “It’s done so legally, and it’s done so without the knowledge that it might be required to share information with the federal government.”
Sen. Adam Schiff, right, walks with Sen. Alex Padilla, during a visit to an immigration detention center on Jan. 20, 2026, in California City, California. (Marcio Jose Sanchez/AP Photo)
More than a million unauthorized immigrants have California driver’s licenses, thanks to a 2013 law known as AB 60 that allows residents to obtain a license regardless of their immigration status. And more than 100,000 students without status are enrolled in California public universities, where they qualify for in-state tuition and some state financial aid under AB 540, passed by the Legislature in 2001.
Sen. Alex Padilla, who helped spearhead AB 60 when he was a state lawmaker, called the administration’s move an effort to vilify immigrants by holding hostage aid to seniors, people with disabilities and struggling families.
“Instead of doing anything to make life more affordable, this administration is choosing to distract from their disastrous policies by sowing chaos and fear,” Padilla told KQED in a statement. “Kids and working families will pay an even greater price because of their cruelty, and I won’t stop fighting for the justice they deserve.”
Johnson called the Department of Justice’s new opinion unusual from a legal standpoint, and he said he expects it to be challenged in court by states such as California on the grounds that it is arbitrary and capricious and doesn’t consider the interests of those who’ve relied on the Clinton-era understanding of the law.
“It’s very rare to reinterpret an interpretation that was put into place a quarter-century ago and has never been questioned or undermined by legislation or a court decision in any way,” he said.
But Johnson cautioned that the opinion was carefully written and could be challenging to overturn.
A spokesperson for California Attorney General Rob Bonta said the office is reviewing it.
“The Trump administration is continuing to try to coerce states into its hateful agenda, this time by attempting to rewrite decades-old law,” spokesperson Nina Sheridan said. “We’re evaluating the Office of Legal Counsel’s opinion.”