Federal Funding Tied to State Immigration Compliance

Both the Biden and Trump administrations have linked federal funding to state compliance with federal laws, particularly on immigration and diversity, equity, and inclusion (DEI) policies. Recently, Labor Secretary Lori Chavez-DeRemer warned governors that states could lose federal unemployment funds if they provide benefits to undocumented immigrants, urging the use of federal verification systems. Transportation Secretary Sean Duffy has also threatened to withhold billions in federal transportation grants from states that do not cooperate with Immigration and Customs Enforcement (ICE) or continue with DEI policies. These actions stem from multiple Trump executive orders aimed at enforcing immigration laws, ending DEI programs, and protecting free speech. States that issue driver's licenses to undocumented immigrants or fail to comply with federal enforcement risk losing crucial funding for infrastructure and unemployment programs. The federal warnings are seen as attempts to enforce administration priorities and target Democrat-led states that resist these measures.