MSNBC host Alicia Menendez and Maryland House of Delegates Majority Leader David Moon (D) on MSNBC on July 4, 2025 (Image: Screengrab via MSNBC / YouTube)
President Donald Trump's administration withholding federal money Congress appropriated to blue states can present a unique opportunity for Democratic-controlled state governments, according to two Democratic state legislators from blue states.
In a Friday segment on MSNBC's "Deadline: White House," Maryland House of Delegates Majority Leader David Moon (D) told host Alicia Menendez that two bills he's introduced would enable his state to begin withholding state funds meant for the federal government. Moon defended the bills as necessary due to the Trump administration's recent announcement withholding $7 billion from K-12 schools across the country.
According to the Baltimore Sun, Maryland was counting on $125 million for after-school programs, teacher training programs and summer programs prior to the Department of Education suddenly announcing a day before the money was to be disbursed that it was simply "unavailable." Moon said the state was now in "unprecedented times" and had to consider strict measures.
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"I introduced bills to treat the federal government as deadbeat debtors, and basically have Maryland act like a collections agency," Moon said. "So we're talking about withholding funds that's owed to the feds and putting liens on their property."
Menendez was curious about how Moon's proposal would be implemented, and asked whether such a strategy has ever been put into practice. Moon acknowledged that states holding money hostage meant for the federal government was unconventional, but argued that his proposed means of doing so were ordinary. And he reminded viewers that Trump has a history of stiffing creditors.
"It's not novel for people who are trying to chase people that are running away from their debts," he said. "Certainly this White House, this president, is someone who is no stranger to trying to walk away from obligations and debts just because he simply doesn't want to pay them."
The Maryland Democrat went on to observe that when the federal government doesn't deliver money that was promised, states have to fill in the gaps. And because states have to tax for every dollar they spend, that means the federal government reneging on its promises forces states to make cuts to their own public services.
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"We don't have the time for school systems that are open right now to have to wait for lengthy court battles and appeals to wind down in years, probably," Moon said. "These these are funds that were counted on by local school systems across the country for the current year. So what they're doing is so unprecedented that it does require us at the states to have some way of defending ourselves."
"Trump and [Vice President JD] Vance have said very plainly that they plan to expand executive power and ignore court orders when they do this," he continued. "What are we to do? Well, we need to take self-help measures like we're talking about, withholding funds we owe them so that we have an immediate way of addressing school system shortfalls that are happening right now."
Washington state senator Manka Dhingra is planning to introduce similar legislation in the Evergreen State. She pointed out that her state was counting on $137 million from the $7 billion the administration was withholding to pay for school programs in the coming academic year. To illustrate her point, she said that 28% of the Washington state budget is made up of federal money appropriated by Congress. And the Coalition on Human Needs found in January that 32% of state budgets are made up of federal money. And poor, rural states often rely on it the most, with federal money making up 45% of Mississippi's state budget.
"It's about making sure that we can continue to keep people receiving mental health services, physical services, housing and things that they are entitled to," Dhingra said. "And so we have to make sure that when decisions are made in an arbitrary fashion, the states are able to stand up and fight back."
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Watch the segment below, or by clicking this link.