DOJ Widens Immigration Rule, State Funds at Risk
By Solange Reyner 02 September 2026 www.newsmax.com
Every state agency must report people it knows to be in the country illegally to federal authorities, the Justice Department ruled Tuesday, reversing a 27-year-old legal opinion that had read the requirement more narrowly.
The opinion, signed by Deputy Assistant Attorney General Joshua J. Craddock, reinterprets Section 404 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the law that overhauled the federal welfare system.
The provision requires any participating "State" to report to the Department of Homeland Security the name and other identifying information of any individual the state knows is unlawfully present in connection with Temporary Assistance for Needy Families, Supplemental Security Income and certain public housing programs.
The department's 1998 opinion had read "State" to mean only the specific state agency that administers the covered program.
The new opinion rejects that reading, citing PRWORA's own statutory definition of "State," which covers the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa as sovereign units — not individual agencies. The department concluded the earlier opinion "erred in its analysis and result" by reading ambiguity into text it called unambiguous.
The Justice Department acted at the request of the Department of Health and Human Services, which administers TANF and SSI grants to states. HHS's acting general counsel asked the department in June to reconsider the 1998 opinion "to protect that program's availability to vulnerable Americans," according to the opinion.
TANF provides about $16.5 billion annually in block grants to states, according to the Government Accountability Office. SSI's federal appropriation was about $62 million for fiscal year 2025.
States that fail to comply could lose that funding.
The opinion says the reporting duty attaches separately to TANF, SSI, and HUD housing contracts, meaning the federal agency overseeing each program can withhold its funding from a noncompliant state independent of the others — HHS could cut off TANF grants, for instance, without affecting a state's SSI funding or HUD contracts.
The opinion states its interpretation applies only prospectively and does not retroactively alter existing TANF or SSI funding agreements. States that continue to participate in either program going forward, however, will now face broader reporting obligations across their state governments rather than within the single agency that runs the benefit program.
The Justice Department rejected arguments that Congress' silence on the issue over nearly three decades ratified the narrower 1998 interpretation, and it concluded the reporting condition is sufficiently related to Congress' interest in preventing ineligible noncitizens from receiving federal benefits to survive a Spending Clause challenge.
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