The Justice Department has issued a warning to states, indicating they could lose billions of dollars in federal welfare funding if they fail to report individuals known to be in the country illegally to the Department of Homeland Security (DHS). This directive stems from a legal opinion by the DOJ's Office of Legal Counsel, which mandates that all state agencies in participating states must report undocumented immigrants to DHS. This represents a significant departure from a 1998 interpretation that limited reporting requirements to only those agencies directly administering specific welfare programs.

Previously, the responsibility to report undocumented immigrants was confined to state agencies managing federal welfare funds. The new guidance expands this mandate to include other state agencies, such as departments of motor vehicles and educational institutions, which may encounter or have knowledge of undocumented individuals. Deputy Assistant Attorney General Joshua Craddock stated that non-compliance could result in "serious consequences, including loss of program funding."

The affected welfare programs are Temporary Assistance for Needy Families (TANF), which receives over $16.5 billion in federal grants annually, and Supplemental Security Income (SSI), with federal benefits exceeding $60 billion annually. It is noted that undocumented immigrants are not eligible for either TANF or SSI benefits.

This policy shift could potentially face legal challenges, as some Democrat-led states have previously contested efforts by the administration to collect personal details of individuals receiving funds under programs like TANF. Courts have also placed limitations on some administration initiatives to compel the sharing of migrant information with DHS, although some rulings have permitted federal immigration authorities to access certain data, including Medicaid records.

All 50 states and Washington, D.C., participate in the reporting requirements associated with TANF and SSI. The administration's approach to immigration enforcement has been characterized by an aggressive stance since President Trump's return to the White House, including efforts to collaborate with state and local law enforcement to identify and locate suspected undocumented immigrants.