U.S. President Donald Trump salutes, during the annual National Memorial Day Observance in the Memorial Amphitheater, at Arlington National Cemetery in Arlington, Virginia, U.S., May 26, 2025. REUTERS/Ken Cedeno
Axios reports the White House is terminating federal grants intended to update states’ aging unemployment systems, claiming the money was being spent on equity projects.
The Trump Labor Department told Axios the grants were "squandered" on "bureaucratic and wasteful projects that focused on equitable access rather than advancing access for all Americans in need.”
Critics say words like “equity” often draw a target from the Trump administration, but Axios reports "equity" in this case was not the type “typically considered DEI.”
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A Department of Labor report concerning the grants specifically defined “equity” as “efforts to promote equitable access to unemployment insurance include eliminating administrative barriers to benefit applications, reducing state workload backlogs, improving the timeliness of UC payments to eligible individuals, and ensuring equity in fraud prevention, detection, and recovery activities.”
Many of the system updates funded by the grants included strengthening ID verification systems, which “multiple states” reported as having “resulted in significant reduction in the number of fraudulent claims.”
Andrew Stettner, who led the modernization efforts during the Biden administration, told Axios some states were working slower than others to spend the money, meaning some will be left with more work to complete on their own.
"When I left in December, states had spent about $100 million of the $219 million specifically for equity but only $2 million of the $204 million for IT," said Stettner. "… States were in the middle of all the planning and procurement. Now they're really holding the bag for finishing.”
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It is unclear how the sudden removal of the grants will impact low-revenue red states like Mississippi. The Mississippi Department of Employment Security did not immediately return calls to AlterNet.
Read the full Axios report here.
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