In a dramatic turn of events coinciding with a government shutdown, the Trump administration has announced the cancellation of nearly $8 billion in federal funding for climate and green energy projects. The move, unveiled by Office of Management and Budget (OMB) Director Russ Vought on October 1, 2025, specifically targets projects in 16 states—each of which voted against President Trump in the 2024 election. The list of affected states includes California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Vermont, and Washington.
Vought took to the social media platform X to share the news, stating, “Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being cancelled. More info to come from @ENERGY.” The Department of Energy (DOE), which oversees many of these projects, has yet to clarify precisely which initiatives will lose funding, leaving state officials, industry leaders, and environmental advocates scrambling for answers.
The timing of the announcement is no coincidence. The federal government shut down at midnight on October 1 after Congress failed to pass a stopgap funding bill, an event Republicans have dubbed the “Schumer Shutdown.” According to the White House, the administration is using the shutdown as an opportunity to cut what it describes as wasteful spending tied to the “Green New Deal” and other Democratic-backed climate programs. The FY2026 budget memo from the White House makes the administration’s priorities clear: “The Budget cancels over $15 billion in IIJA ‘Green New Deal’ funds purposed for unreliable renewable energy, removing carbon dioxide from the air, and other costly technologies that burden ratepayers and consumers.”
Additionally, the administration has eliminated a $100 million environmental justice program, which the memo claims “enabled a witch hunt against private industry” and “gave taxpayer dollars to political cronies who exploited the program’s racial preferencing policies to advance an anti-oil and gas crusade.”
Former Representative Jason Isaac, now head of the American Energy Institute, praised the move on X: “$8 billion in Green New Scam handouts just got torched. That’s $8 billion fewer dollars for climate grift, ESG rackets, and unreliable energy schemes. Good riddance.” Republican Senator Cynthia Lummis of West Virginia echoed this sentiment, responding “Great!” to Vought’s post.
Yet, the decision has sparked outrage among Democrats and climate advocates, who argue that the cuts are not only politically motivated but also threaten to undermine progress on clean energy and climate resilience. Senator Chris Murphy of Connecticut called the move “just naked and brazen corruption,” adding, “All states represented by Democrats in the Senate. Time to stiffen our spines and demand that we only fund a government that obeys the law.” Senator Ed Markey of Massachusetts warned that the suspension of federal projects could drive up electricity prices and hamper efforts to address climate change.
Speaking to reporters on October 1, former President Trump defended the administration’s actions, insisting the shutdown was forced by Democrats. “They are shutting it down. We’re not shutting it down. We don’t want it to shut down because we have the greatest period of time ever. I told you we have $17 trillion being invested, so the last person that wants it shut down is us,” Trump said, as reported by Breitbart News. He added, “With that being said, we can do things during the shutdown that are irreversible that are bad for them, and irreversible by them–like cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”
Trump also singled out OMB Director Vought for his role in budget cutting, stating, “You all know Russell Vought, he’s become very popular recently because he can trim the budget to a level that you couldn’t do any other way.” The former president further criticized Democrats for what he described as prioritizing healthcare for undocumented immigrants, particularly in California, and blamed them for the shutdown, saying, “We can’t have that. We’re not going to let it happen.”
This latest round of funding cuts is consistent with the Trump administration’s broader approach to energy and climate policy. Since taking office, the administration has moved to slash federal support for renewable energy and climate action, while seeking to revive the coal sector through regulatory rollbacks and additional financing for coal-fired power plants. Energy Secretary Chris Wright recently announced that the DOE is aiming to “return more than $13 billion in unobligated funds” that had been authorized during the Biden administration for clean energy projects. However, the specifics of which projects would be affected remain unclear, as the DOE has not responded to repeated requests for comment from CNBC and other media outlets.
Behind the scenes, DOE staffers have described a climate of uncertainty and frustration. One agency staffer, who spoke to Politico on condition of anonymity, said, “Lists of projects that are supposed to get cut have been wafting around the building for weeks. Most of the time, they are very partisan in terms of what states canceled projects are from. It’s just naked politics.”
The impact of these cancellations is expected to be substantial, especially in states with ambitious climate goals and burgeoning clean energy industries. Many of the affected projects were designed to accelerate the transition to renewable energy, improve energy efficiency, and develop new technologies for carbon capture and storage. The loss of federal funding could stall or even derail some of these efforts, setting back state and local initiatives and potentially leading to layoffs or project shutdowns.
For now, the fate of billions in climate and infrastructure funding hangs in the balance. With the government still shut down and partisan tensions running high, both sides are digging in for a prolonged battle over the future of federal spending. As the DOE reviews its portfolio and lawmakers trade accusations, communities and industries across the affected states are left waiting for clarity—and bracing for the fallout.
With political maneuvering intensifying and the stakes for climate policy rising, the coming weeks will reveal whether these funding cuts are a temporary setback or a turning point in America’s approach to clean energy and environmental justice.
