The Department of Justice’s Office of Legal Counsel (OLC) issued an opinion Tuesday directing states that receive federal food stamp and Social Security assistance to report the presence of known illegal immigrants to the Department of Homeland Security (DHS). The opinion, published Wednesday, interprets a 1996 welfare reform law as imposing reporting obligations not just on state agencies administering the programs, but on all agencies within a participating state.
The opinion applies to states participating in the Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) programs. According to the Justice Department, all 50 states, the District of Columbia, and multiple U.S. territories participate in these programs, receiving a combined $16.4 billion annually. That means states that have declared themselves “sanctuaries” for illegal immigrants—including California, New York, and most recently Virginia—would be required to hand over information that could help Immigration and Customs Enforcement (ICE) in its mass deportation operations.
“When a state chooses to participate in TANF, it accepts the obligation to report illegal aliens in the United States,” Assistant Attorney General T. Elliot Gaiser, who heads OLC, said in a Wednesday press release. “Tax dollars intended to help vulnerable Americans should not perversely encourage illegal entry into the United States, but rather should reinforce our laws and our borders.”
The new opinion overturns a 1998 Clinton-administration interpretation that restricted the reporting requirement to only the state agencies directly administering the welfare programs. The OLC stated that it withdrew the 1998 opinion, finding its statutory interpretation erroneous.
“We likewise do not find the concept of congressional acquiescence to be a persuasive reason to cling to the 1998 Opinion’s erroneous statutory interpretation,” the opinion reads. “The fact that subsequent congresses have not affirmatively corrected the 1998 Opinion’s interpretation of section 404 does not alter the plain meaning of the statute. Indeed, it is constitutionally problematic to equate legislative inaction with action.”
Joshua Craddock, the OLC deputy assistant attorney general who authored the opinion, said the ruling does not create “new obligations on states.” Instead, he said, it “restores the original meaning of the statute Congress enacted and ensures that DHS receives the information it is legally entitled to.” States that fail to comply risk losing program funding, Craddock added, though the Justice Department clarified that states will not face “retroactive penalties” because they had relied on the Clinton-era guidance.
The opinion arrives amid an intensified Trump-administration focus on welfare fraud, particularly involving illegal immigrants and other foreign nationals. The crackdown has included the Department of Agriculture (USDA) halting Supplemental Nutrition Assistance Program (SNAP) funding for states that refuse to provide immigration status data to the federal government. The OLC opinion appears to offer another avenue for pressuring states to cooperate.
Broader Context and Historical Shifts
The Federalist, which first reported on the OLC opinion, noted that the Clinton administration took numerous steps that critics say facilitated illegal immigration, including dismantling the “public charge” rule—a century-old standard that barred admission to immigrants deemed likely to rely on government assistance. That rule had governed U.S. immigration law for at least 100 years before being overhauled.
Current data cited in the report suggests that 59 percent of illegal immigrant households receive at least one welfare program, while 52 percent of legal immigrant households rely on such assistance. By comparison, 39 percent of native-born Americans use at least one welfare program—a figure that remains high but underscores that these programs are designed for American citizens.
The OLC opinion is likely to trigger legal challenges from sanctuary jurisdictions, which have argued that state and local immigration enforcement is voluntary and that cooperation with federal authorities could erode trust with immigrant communities. Officials in those states have also raised concerns about the cost and scope of expanding reporting duties beyond welfare agencies to all state offices.
Legal experts note that the 1996 law, passed as part of welfare reform, included a provision requiring states to report illegal aliens to the federal government. The Clinton administration narrowed that requirement to only those agencies directly responsible for administering TANF and SSI. The OLC’s new interpretation broadens it to every agency within the state—a reading that could implicate motor vehicle departments, public universities, and even local law enforcement, depending on how states implement the mandate.
Proponents of the new opinion argue that it corrects a long-standing policy that allowed sanctuary states to flout federal law while still receiving billions in federal welfare dollars. They say the funding is meant to help vulnerable Americans, not to subsidize illegal immigration.
Critics, however, warn that the ruling could lead to privacy breaches and discourage immigrant families from seeking essential services. They also question whether the federal government has the authority to compel state agencies to act as immigration enforcers under this interpretation of the statute.
The Justice Department has not yet announced enforcement actions against any noncompliant states. But the opinion puts states on notice that their continued participation in TANF and SSI now comes with a clear obligation: if you want the money, you must share information with DHS.
As the debate over immigration and welfare continues to shape the 2026 political landscape, the OLC’s opinion adds a new layer of tension between the federal government and states that have positioned themselves as refuges for undocumented immigrants. The coming months will likely see legal battles and legislative responses from both sides.
Source: thefederalist.com — https://thefederalist.com/2026/09/02/doj-tells-sanctuary-states-they-must-report-illegals-to-get-federal-welfare/