President-elect Donald Trump has made bold claims about slashing the federal budget. Hawaiʻi's congressional delegation, who are all Democrats, are bracing for what that could mean for the federal funding Hawaiʻi receives.
Federal funds make up about 20% — or over $3 billion — of the state's budget financing.
"We get some of the highest rates of federal funding in the entire country. We're routinely in the top 10%," said Rep. Ed Case, noting that many of those federal dollars go to programs that help Hawaiʻi residents access food, housing, and healthcare.
"I'm most concerned about anything that's non-defense funding. We have significant amounts of funding in Hawaiʻi that are related to our defense effort in Hawaiʻi," he said.
"I don't believe at least that this administration is going to go in a radically different direction in terms of national defense... but non-defense is a different story."
Trump and his allies have openly discussed extreme measures to reduce federal spending, as well as withholding federal dollars from states that oppose Trump's agenda.
The incoming president has vowed to claw back unspent funds from the Inflation Reduction Act, the largest climate spending package in history, which has channeled millions of dollars to Hawaiʻi and other states to support the clean energy transition.
Trump has also tapped billionaire Elon Musk and entrepreneur Vivek Ramaswamy to lead the amorphous Department of Government Efficiency, who want to reduce federal spending by $500 billion annually. Musk and Ramaswamy have suggested numerous agencies and programs whose funding could be on the chopping block, including the Pentagon, the U.S. Department of Education, and nonprofits that receive federal money like Planned Parenthood — though it's unclear how the two would execute those cuts.
Tom Homan, Trump's nominee for "border czar," said on Sunday that the incoming administration would restrict funds to state and local governments that refuse to cooperate with Trump’s plans to deport millions of undocumented immigrants.
2026 funding in question
Case feels it's too soon to know which, if any, of the assertions that Trump and his nominees are making will come true.
"I'm not going to try to predict this president and his administration any more than anybody else," Case said. "I think that would be dangerous for anybody to believe that they know what's coming."
Case expects that Hawaiʻi's federal funding for the 2025 fiscal year is secure, but he anticipates the state may be on shakier ground the following year.
"Fiscal year 2026 is when we would probably start to see the actual impacts of the Trump and Republican majority stamp on the federal budget," Case said. The federal government's fiscal year 2026 starts on Oct. 1, 2025.
Rep. Jill Tokuda, who serves alongside Case in the House, said some of the budget recommendations from Trump and his nominees "hit at the core of some of the most basic public services people in Hawaiʻi rely on."
For example, the state Department of Human Services, which distributes social services such as Medicaid, Medicare and the Supplemental Nutrition Assistance Program, relies on federal matching to provide that assistance. As a result, federal dollars are its largest funding source.
Tokuda explained that any changes to federal reimbursement of any of these programs could have devastating effects on the state's vulnerable populations.
"When you take a look at potentially a lot of the things that could get slashed, it would literally impact the ability for people to receive care," she said.
Tokuda said that with Trump's return to the White House creating uncertainty about the future of the federal budget, it is critical that Hawaiʻi spend all the federal funds it has already received.
"We don't have a great track record in Hawaiʻi of spending down the dollars that we receive," Tokuda said.
'Chaotic and quixotic'
Not all funding is equally vulnerable. Formula funds, which are dispensed to states automatically through a non-competitive process, maybe less of a target than competitive funds, according to Tokuda.
She contended it would be a "political liability" for Trump and Republican leadership to endanger the pipeline of formula funds, which both red and blue states rely on.
Sen. Mazie Hirono agreed that formula funds, which make up the majority of grants that Hawaiʻi receives, are likely safer than discretionary pots of money that states compete for — like the recent $72 million federal grant awarded to the Department of Hawaiian Home Lands to build out internet access.
But she said Trump's second term offers few certainties.
"We have an incoming president who is very chaotic and quixotic, I would say," Hirono said, "And so there's a huge element of unpredictability."
She cautioned that even the most radical proposals, like Elon Musk's calls to reduce the federal budget by $2 trillion, should be taken seriously.
"It's hard to predict, but I can see Musk doing those things and I can see Trump letting him do it," Hirono said.
Sen. Brian Schatz, however, believes significant reductions to Hawaiʻi's federal funding are unlikely.
"In the first Trump administration, we were successful in securing funding for Hawaiʻi and protecting Hawaiʻi, and I don't think this time will be any different," Schatz said.
Schatz expects a "bipartisan coalition of governors" to push back against cuts to programs like SNAP and Medicaid, which serve millions of people across the country.
"We're going to have to fight for it, but I think we will be fine in the end," Schatz said.
If the cuts were to happen, Schatz added that the state will not be able to supplement the lost federal funding.
"This isn't on the state... it is, generally speaking, not possible for the state to step in just because of the dollar amounts involved," he said.
The state will face its own economic challenges this coming legislative session, which starts in January. That's largely due to the anticipated $125 million drop in state tax collections following the passage of a historic income tax cut that will continue to ramp up over the next seven years.
Prioritizing disaster aid
While Trump talks about scaling back federal spending in his second term, President Biden is still working to secure major allocations from Congress before he leaves office.
Last week, the Biden administration called on Congress to provide $100 billion in emergency funding to go towards multiple disaster recovery efforts across the country.
All four members of Hawaiʻi’s congressional delegation said that it was imperative that Congress approve the supplemental disaster aid before the end of the year.
"The one thing we cannot leave undone in December is disaster aid," Schatz said on the Senate floor last Friday.
When he spoke to HPR last Friday, Schatz said that the outlook for the bill seemed good and that his office was having "constructive conversations" with both Democrats and Republicans.
"Anything could go wrong, for sure, but right now, we are in a stage of the negotiations where we're actually passing proposals back and forth between the parties and between the House and the Senate, so we're getting serious about this," Schatz said.
The $100 billion will help the southern states contend with the devastation of Hurricane Helene and Hurricane Milton — as well as support the ongoing recovery effort on Maui.
"The south just got hit with a number of different hurricanes, but we still need that money for recovery on Maui," Tokuda said. "And so it's absolutely critical that even before the Trump administration starts, we have got to get this appropriated."
The bill would give the Federal Emergency Management Agency a much-needed infusion of $40 billion, and restore funding to the Small Business Administration's disaster loan program, which ran out of money last month.
"That's really unthinkable, when you consider all of the different small businesses that have been hit by disaster, both in Hawaiʻi and across the country," Tokuda said.
In his first term, the Trump administration blocked aid to Puerto Rico after Hurricane Maria, which caused 2,975 deaths and left some residents without power for nearly a year. He also hesitated to provide wildfire aid to California, a Democratic stronghold, in 2018, according to an investigation from Politico.
Case doubts that Trump would restrict aid to Hawaiʻi if it faced another disaster like the 2023 Maui wildfires. But he is apprehensive about the increased financial strain on the federal budget as the country contends with the aftermath of multiple major weather events. Just this year, the U.S. has experienced 24 different weather and climate disasters that cost over $1 billion.
"I'm not so much worried about — today, at least — about President Trump denying federal disaster relief to legitimate disasters," Case said. "But I am worried about the number of disasters and the extent of disasters and the expense of disasters that's occurring, which is going to require us to stretch our own federal budget."
