The Trump administration is threatening to withhold tens of millions of dollars in federal homeland security funds from states unless they adopt sweeping election changes, according to multiple sources and internal documents obtained by CNN, even as a federal court has blocked a key pillar of the president's election agenda.
Under new rules governing several homeland security grant programs, states must take a number of steps, including phasing out certain electronic voting systems and moving to hand-marked paper ballots. They must also run their voter rolls through a controversial Department of Homeland Security citizenship verification database. If not, states would lose out on some funding from DHS. These grants, expected to total more than $1 billion in the current fiscal year, are one of Washington's main vehicles for helping state and local governments prevent terrorism, protect infrastructure and prepare for major disasters.
Federal Overreach Meets State Authority
The new guidelines, which CNN obtained and are expected to go out to states later this month, impose a set of mandatory reforms and steep penalties for noncompliance. States that refuse would lose 20% of the grant money, potentially millions of dollars in security funds. The gambit fits a broader Trump playbook: using federal funds as leverage to pressure states to adopt policies aligned with his agenda. The administration has taken similar steps to punish states over immigration policies and diversity, equity and inclusion initiatives. Courts have blocked some of those efforts, and this one could soon face legal challenges as well.
David Becker, a former Justice Department lawyer who now advises election officials, said, "I expect (the new requirements) will be blocked in the courts." The Constitution gives states control over administering the ballot. Congress can pass election regulations, but the president has very limited powers to force election rule changes on his own, courts have found.
The new mandates target several pillars of state election administration and oversight. They require states to conduct manual election audits using methods established by the Trump administration and to use an approved government system to verify the citizenship of any person working at a polling location. States must also submit a plan to phase out voting systems that do not use paper ballots that voters can mark by hand, which are tabulated during elections.
Most jurisdictions already offer hand-marked paper ballots. But about 30% of voters in the country live in places that rely entirely on ballot-marking devices, machines that record a voter's choices and print a paper ballot for counting, or on direct-recording systems that store votes electronically. Among the places that would be forced to transition under the new rules are Delaware, Georgia, Nevada and South Carolina, as well as Los Angeles County.
Flawed Database Raises Concerns About Voter Purges
The grant conditions also require states to run their full voter rolls through SAVE, or Systematic Alien Verification for Entitlements, a tool used to identify potential noncitizen voters. Critics say the DHS system is flawed because it can produce false matches and may wrongly flag eligible voters for removal. Many states already use SAVE to vet voter rolls. Others have refused. The Justice Department has sued 30 states for declining to hand over their voter lists for a federal audit using the system.
A federal judge on Monday ruled that a recently revamped version of SAVE can no longer be used. U.S. District Court Judge Sparkle L. Sooknanan sided with advocacy groups that argued the recent upgrades to the program aggregated Americans' sensitive personal data in a way that could result in voters being wrongly purged from voter rolls. Sooknanan said, "All in all, the federal government has knowingly trampled on the privacy rights of American citizens in a manner that threatens the sacred right to vote." She added, "This Court cannot stand idly by while that happens."
She said Congress had expressly prohibited the government from centralizing Americans' personal identifying information and that the federal agencies that created the SAVE program "knew that the database violates those statutory protections." The decision is a major legal setback for President Donald Trump in his efforts to use federal agencies to encourage a nationwide crackdown on having noncitizens illegally on state voter rolls.
Voting by noncitizens is already illegal and punishable as a potential felony that could lead to deportation. It also is rare, accounting for just a tiny fraction of those on state voter rolls. At least 25 states used SAVE to check their voter rolls since April 2025, after the Trump administration significantly expanded its search abilities. Since then, at least 67 million registrations have been scanned through the program, but critics worry it could end up purging valid voters from the rolls.
Naturalized Citizens at Risk
Anthony Nel was one of those whose registrations were wrongly flagged. The South Africa native became a U.S. citizen more than a decade ago but had his voter registration in Denton, Texas, north of Dallas, canceled temporarily last year after Texas ran its voter file through SAVE. The check wrongly identified him as a potential noncitizen. Nel said, "I hope others can see this fight and not take their right to vote for granted."
The plaintiffs, including the League of Women Voters, the Electronic Privacy Information Center and five unnamed U.S. citizens, had alleged the revamped SAVE program violated Americans' privacy and voting rights. The groups also alleged the Trump administration violated federal privacy laws by ignoring transparency requirements about the changes to the system.
The judge wrote, "The agencies were scrambling to comply with an Executive Order aimed at reshaping federal elections, which directed them to create a system for mass voter verification." She added, "So they haphazardly combined and repurposed the private information of millions of Americans, including citizenship data that they knew to be unreliable."
Plaintiffs attorney Nikhel Sus told the court during the October hearing that naturalized citizens face a greater risk of unlawfully being purged from voter rolls. "They are uniquely vulnerable to errors in the database," said Sus, an attorney for Citizens for Responsibility and Ethics in Washington. Sus said Monday he sees Sooknanan's ruling as an "across the board victory" and noted the plaintiffs were pleased the judge's ruling reinforced their argument that the federal government does not have implied authority to freely share sensitive data across agencies.
Mark Johnson, who teaches at the University of Kansas law school and regularly pursues lawsuits over election laws, said "it couldn't be more clear" that the SAVE program violates federal privacy laws. He said an executive order from Trump cannot override a federal law. "It's an illegal idea. Plus it's a bad idea," he said.
Costly Mandates for Cash-Strapped States
The election changes Trump is seeking could be enormously expensive for states. For instance, the nationwide cost of upgrading election equipment to align with voluntary voting standards has been estimated at $2.7 billion. In Georgia, where the state legislature has also passed a law to require hand-marked paper ballots, Republican Secretary of State Raffensperger has estimated it will cost $66 million. The new grant plan ups the ante by using a much larger share of the homeland security funding as leverage. Still, the cost of complying might ultimately be even greater than the total amount being withheld from a state, though the grant guidelines specify that states can request additional funding to help implement these changes.
Homeland security grants have already become a tool for the administration to pressure states into falling in line with the president's policy goals. Last year, officials tried to withhold money unless states submitted updated population counts reflecting the administration's mass deportation campaign, but several states sued and a court blocked the policy.
Political Context
President Donald Trump is going to a Mack Truck facility in a battleground district in swing state Pennsylvania Tuesday, shifting attention to the U.S. economy in his first major public event beyond the capital since he signed an interim agreement to end the Iran war. Trump's trip to the Allentown-area business comes as he works to try to put the conflict and the higher gasoline prices it caused in the rearview mirror as November midterm elections draw closer.
The visit comes amid rising prices that could color the verdict voters render on Trump's stewardship in the fall. About one-third of U.S. adults approved of Trump's approach to the economy, according to a June Associated Press-NORC Center for Public Affairs Research poll. That was in line with last month for Trump on the issue.
The Iran war, which began Feb. 28, has also been a politically difficult issue for the president. Most Americans continued to disapprove of his handling of Iran, according to the June AP-NORC poll, which was being fielded as Trump announced a tentative deal with Iran and concluded just before the interim agreement was signed last week. It found about two-thirds, 65%, of U.S. adults disapprove of how the president is handling issues with Iran, unchanged from May.
The Macungie, Pennsylvania, facility is in the 7th Congressional District, where incumbent Republican Rep. Ryan Mackenzie faces Democratic challenger Bob Brooks in November. Brooks, president of the state firefighters' union, has support from Democratic Gov. Josh Shapiro, who is also seeking reelection this year.
Housing Package Advances
Separately, the Senate advanced a massive, Trump-backed housing package that proponents say will prevent the U.S. from becoming a "nation of renters." The upper chamber sent the 21st Century Road to Housing Act to the House on Monday after months of delay. After the heads of the House Financial Services Committee and Senate Banking Committee reached a deal last week, the package is on a glide path to President Donald Trump's desk.
Sen. Elizabeth Warren, D-Mass., one of the architects of the package, said the legislation was "not the federal government big footing local government," but instead the federal government laying out tweaks to current programs and policies that "over time will make housing more affordable." Warren said, "This is a housing package that will help increase supply and bring down costs." She added, "One way is by beating back private equity, so they won't invade your neighborhood, buy up all the houses, and turn America into a nation of renters."
Loaded with nearly 60 different provisions, the package broadly tackles rolling back some permitting regulations, launches several pilot grant programs to build, repair and push affordable housing construction, and blocks investors from buying up housing stock, a key provision pushed by Trump. The package also tries to turbocharge housing stock by tying federal grants and incentives sought by local governments to housing construction. There are tweaks to mortgages, with a push for small-dollar mortgages at $100,000 and updates to lending standards for manufactured homes.
While there are several moving parts to the 21st Century Road to Housing Act, it does not tackle every facet of housing costs. For instance, it does not allocate fresh federal funding for the issue, as Senate Banking Committee Chair Tim Scott, R-S.C., has lauded the package as being deficit neutral. Nor does it directly address rising costs of homeownership, given that much of the thrust is focused on building new homes and lowering the barrier of entry for Americans to get into a home.
Why This Matters:
The Trump administration's push to withhold federal security funding unless states overhaul their election systems represents a fundamental challenge to federalism and voting rights protections. The court's finding that the SAVE database violates privacy laws and threatens to purge eligible voters—including naturalized citizens like Anthony Nel—underscores the human cost of using flawed tools to address a problem that experts say is vanishingly rare. With at least 67 million voter registrations already scanned and states facing the choice between losing millions in security funding or implementing costly election changes estimated at $2.7 billion nationwide, the burden falls disproportionately on cash-strapped states and vulnerable voters. The judge's conclusion that agencies "haphazardly combined and repurposed the private information of millions of Americans" while rushing to comply with executive orders highlights the tension between executive power and democratic safeguards. As midterm elections approach with Trump's approval on the economy at about one-third and two-thirds disapproving of his Iran handling, these election policy moves take on added political significance in battleground states like Pennsylvania, where working-class voters face both economic pressures and potential barriers to ballot access.