Granted Research
The two-speed grant economy
In federal fiscal year 2025, total federal grant obligations rose to a post-COVID high of $1.24T. But almost all of that increase came from one program. Medicaid grew $70.1B. Strip Medicaid out and the rest of the federal grant economy — the money nonprofits, schools, and agencies actually compete for — shrank 3.9%. This is a two-speed grant economy: one lane accelerating, the other braking.
Last verified July 2026. net obligations, FY = Oct–Sep, as of July 8, 2026.
$1.24T
Total FY2025 grant obligations
a post-COVID high
+10.8%
Medicaid (CFDA 93.778)
+$70.1B
-3.9%
Every other grant, combined
-$21.0B
58%
Of all grant dollars are Medicaid
FY2025 — more than all else combined
In FY2025, total federal grant obligations rose to $1.24T — but Medicaid alone accounted for all of the growth. Every other federal grant, taken together, fell 3.9% from FY2024.
Source: Granted AI analysis of USAspending federal financial-assistance obligations (grant-type awards), fiscal year by action date.
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<iframe src="https://grantedai.com/research/two-speed-grant-economy/embed" width="100%" height="480" style="border:1px solid #e5e7eb;border-radius:12px" title="The two-speed federal grant economy — Granted AI" loading="lazy"></iframe>Does this match the official numbers?
Yes, to within about a percent. USAspending’s own spending-over-time tool, filtered to the same four grant-type codes, reports $1.24T in FY2025 and $1.21T in FY2024. Our figures are computed independently from the award-level records and land just below official on both years.
| Fiscal year | Granted (this study) | USAspending (official) | Difference |
|---|---|---|---|
| FY2024 | $1.19T | $1.21T | -1.6% |
| FY2025 | $1.24T | $1.24T | -0.2% |
Because our FY2024 figure runs 1.6% below official and FY2025 only 0.2% below, our measured year-over-year growth (+4.1%) is a touch higher than the official +2.7%. The gap is award-record timing, not a difference in method; the Medicaid-versus-everything-else split — the actual finding here — is unaffected. Critically, all fiscal years are derived from each action’s date, not the labeled fiscal-year field, which misfiles October transactions into the prior year and reads FY2025 roughly 15% low.
What grew, and what shrank
Medicaid (CFDA 93.778) is now 58% of every federal grant dollar — more than all other grants combined. Its +$70.1B increase more than covered the -$21.0B decline everywhere else, so the headline total rose even as the competitive grant economy contracted. The clearest contractions were concentrated in a handful of agencies that had been distributing one-time infrastructure and climate money.
| Awarding agency | FY2024 | FY2025 | Change | % |
|---|---|---|---|---|
| EPA | $43.5B | $25.6B | -$18.0B | -41.3% |
| Commerce | $29.5B | $21.2B | -$8.3B | -28.3% |
| Homeland Security | $19.4B | $13.3B | -$6.1B | -31.6% |
| USAID | $10.0B | $2.3B | -$7.7B | -76.9% |
The EPA drop is almost entirely the Greenhouse Gas Reduction Fund (GGRF) unwind — the roughly $20B green-bank program obligated in FY2024 that was frozen and clawed back in FY2025. USAID’s -76.9% collapse reflects the wind-down of foreign-assistance grant-making. Commerce and Homeland Security fell as one-time broadband and disaster obligations that spiked in FY2024 did not repeat at the same scale.
The clawback signal
Underneath the totals, downward adjustments — grants being de-obligated, or pulled back — deepened to -$81.5B in FY2025, up 17.7% from -$69.2B in FY2024. Net obligations still rose on Medicaid’s strength, but the volume of money being taken back off the books grew faster than the economy it sits in — an early sign of the pullback that the FY2025 baseline precedes.
The state ledger: where the money moved
On paper, Medicaid’s growth lifted 33 of 51 jurisdictions into the green. But strip Medicaid out — leaving the competitive, discretionary grants that organizations write proposals for — and the picture flips: 30 of 51 jurisdictions lost ground year over year. That is the two-speed economy at the state level. The table below shows every jurisdiction’s total change and its ex-Medicaid change; the full per-state Medicaid split is in the downloadable CSV.
| # | Jurisdiction | FY2024 | FY2025 | Total change | Total % | Ex-Medicaid % |
|---|---|---|---|---|---|---|
| 1 | California | $162.5B | $186.3B | +$23.8B | +14.6% | +3.5% |
| 2 | New York | $111.9B | $109.6B | -$2.3B | -2.0% | -4.1% |
| 3 | Texas | $62.3B | $69.1B | +$6.8B | +10.9% | +3.2% |
| 4 | Pennsylvania | $48.1B | $47.6B | -$502.1M | -1.0% | -15.6% |
| 5 | Florida | $44.3B | $47.6B | +$3.3B | +7.4% | +6.9% |
| 6 | North Carolina | $33.9B | $44.9B | +$11.0B | +32.4% | +39.9% |
| 7 | Ohio | $39.2B | $42.6B | +$3.3B | +8.5% | +6.0% |
| 8 | Illinois | $35.7B | $37.2B | +$1.5B | +4.2% | +2.5% |
| 9 | Michigan | $33.3B | $35.3B | +$2.0B | +5.9% | +21.1% |
| 10 | Massachusetts | $30.1B | $31.4B | +$1.3B | +4.4% | -2.2% |
| 11 | Virginia | $27.3B | $28.7B | +$1.4B | +5.0% | -8.3% |
| 12 | Arizona | $25.0B | $28.4B | +$3.4B | +13.5% | -5.5% |
| 13 | Georgia | $23.5B | $27.9B | +$4.4B | +18.7% | +18.6% |
| 14 | New Jersey | $25.5B | $27.6B | +$2.2B | +8.5% | +9.3% |
| 15 | Washington | $28.5B | $24.5B | -$4.1B | -14.2% | -12.0% |
| 16 | Kentucky | $23.0B | $24.1B | +$1.0B | +4.5% | -7.6% |
| 17 | District of Columbia | $27.0B | $23.9B | -$3.1B | -11.5% | -13.5% |
| 18 | Oregon | $20.3B | $23.3B | +$3.1B | +15.2% | -15.6% |
| 19 | Maryland | $31.9B | $22.6B | -$9.4B | -29.3% | -46.4% |
| 20 | Indiana | $23.3B | $22.6B | -$734.8M | -3.2% | -22.3% |
| 21 | Louisiana | $22.7B | $21.4B | -$1.4B | -6.0% | -15.1% |
| 22 | Minnesota | $19.5B | $20.9B | +$1.4B | +7.4% | +15.1% |
| 23 | Missouri | $22.6B | $20.8B | -$1.8B | -8.0% | -17.8% |
| 24 | Tennessee | $19.2B | $20.0B | +$848.8M | +4.4% | -4.1% |
| 25 | Colorado | $17.2B | $18.1B | +$903.9M | +5.3% | -2.2% |
| 26 | Wisconsin | $16.7B | $15.8B | -$916.6M | -5.5% | -24.0% |
| 27 | South Carolina | $12.7B | $14.4B | +$1.8B | +13.8% | +28.5% |
| 28 | Alabama | $12.7B | $14.4B | +$1.7B | +13.5% | +24.0% |
| 29 | Oklahoma | $14.4B | $14.3B | -$123.1M | -0.9% | -4.8% |
| 30 | Connecticut | $12.7B | $14.1B | +$1.3B | +10.3% | +16.1% |
| 31 | New Mexico | $12.6B | $12.7B | +$96.9M | +0.8% | -19.9% |
| 32 | Arkansas | $10.9B | $12.3B | +$1.4B | +12.9% | +22.4% |
| 33 | Mississippi | $11.1B | $11.3B | +$225.5M | +2.0% | -23.4% |
| 34 | Iowa | $9.8B | $11.0B | +$1.2B | +12.2% | +31.6% |
| 35 | Nevada | $11.0B | $10.6B | -$436.8M | -4.0% | -33.7% |
| 36 | Utah | $9.0B | $8.5B | -$490.5M | -5.5% | -2.3% |
| 37 | Alaska | $6.9B | $8.1B | +$1.2B | +18.0% | +18.7% |
| 38 | West Virginia | $9.4B | $8.1B | -$1.3B | -14.3% | -38.6% |
| 39 | Kansas | $7.3B | $7.4B | +$80.5M | +1.1% | -17.1% |
| 40 | Nebraska | $5.8B | $7.1B | +$1.3B | +23.2% | +11.9% |
| 41 | Hawaii | $5.9B | $6.7B | +$799.5M | +13.6% | +25.5% |
| 42 | Maine | $6.4B | $5.9B | -$467.5M | -7.3% | -18.8% |
| 43 | Idaho | $5.7B | $5.7B | +$26.1M | +0.5% | -19.9% |
| 44 | Montana | $5.2B | $5.5B | +$344.2M | +6.6% | +10.8% |
| 45 | Rhode Island | $5.2B | $5.4B | +$114.5M | +2.2% | -4.1% |
| 46 | Delaware | $4.1B | $4.2B | +$106.3M | +2.6% | +5.1% |
| 47 | North Dakota | $3.1B | $3.6B | +$524.6M | +16.9% | +33.3% |
| 48 | New Hampshire | $3.7B | $3.5B | -$177.7M | -4.8% | -21.1% |
| 49 | Vermont | $3.3B | $3.1B | -$205.8M | -6.2% | -13.2% |
| 50 | South Dakota | $3.4B | $3.1B | -$262.2M | -7.8% | -12.8% |
| 51 | Wyoming | $2.2B | $1.9B | -$255.8M | -11.9% | -11.9% |
Ranked by FY2025 net obligations. Geography is the recipient organization’s state; national organizations headquartered in DC and Maryland inflate those two (see Maryland, below). Beyond the 51 jurisdictions, U.S. territories we hold moved sharply too — Puerto Rico -14.8% ($9.1B) and the U.S. Virgin Islands -35.1% — and are listed in the CSV.
North Carolina
+32.4%$33.9B → $44.9B · biggest % gain
The largest percentage jump of any state, and not only Medicaid. North Carolina’s broadband office drew $1.5B in first-time BEAD broadband money, and its Commerce department booked $1.4B in Community Development Block Grants — the vehicle for Hurricane Helene disaster recovery — up from almost nothing.
California
+$23.8B$162.5B → $186.3B · largest absolute gain
The biggest dollar gain in the country — but $21.9B of the $23.8B was Medicaid. Even California, where BEAD and Clean Ports money arrived, saw its intercity-rail obligations swing sharply negative as prior-year high-speed-rail awards were partly clawed back.
Maryland
-29.3%$31.9B → $22.6B · steepest % drop
Maryland’s 29.3% fall is mostly an artifact, not a local collapse. The Greenhouse Gas Reduction Fund’s national grantees — Climate United Fund ($7.0B in FY2024) and Power Forward Communities, Inc. — are Maryland-headquartered nonprofits, so the GGRF unwind lands as a “Maryland” drop even though the money was national.
Four states where Medicaid rose but the total still fell
In each, Medicaid grew — but a one-time FY2024 discretionary obligation did not repeat, so the total dropped. The two-speed pattern, state by state (drivers verified from the award records).
West Virginia
BEAD broadband deployment fell $1.2B as its one-time FY2024 obligation lapsed.
Nevada
Federal–State Partnership for Intercity Passenger Rail fell $2.0B as its one-time FY2024 obligation lapsed.
Wisconsin
BEAD broadband deployment fell $1.1B as its one-time FY2024 obligation lapsed.
Indiana
BEAD broadband deployment fell $863.1M as its one-time FY2024 obligation lapsed.
Why FY2025 is the baseline that matters
The headline number — grants at an all-time high — is true and misleading at the same time. Federal grant obligations did reach $1.24T, the most on record outside the pandemic surge. But the aggregate is now a Medicaid aggregate: at 58% of every grant dollar, one formula health program is large enough to pull the entire total upward while the grants most organizations rely on are shrinking underneath it.
That distinction matters right now because FY2025, which closed September 30, 2025, is the last complete-year audited baseline before the cuts in the 2025 reconciliation law (the One Big Beautiful Bill Act) begin to bite. Its Medicaid reductions and discretionary caps phase in after this fiscal year. Whatever happens next will be measured against these numbers — which is exactly why the Medicaid-versus-everything-else split, not the reassuring top line, is the number to write down.
Others have circled this story. The Reason Foundation and Cato Institute have published the total federal outlay picture; Federal Funds Information for States (FFIS) maintains a members-only, paywalled grant ledger. What has been missing is a free, public, grant-specific year-over-year ledger — every jurisdiction, Medicaid split out, reproducible from the raw award records. That is what this study is, and the full data is a one-click download.
For an organization planning its funding strategy, the practical read is this: the competitive grant pool is getting smaller, and the contraction is uneven — concentrated in the agencies and states that rode one-time infrastructure and climate money in FY2024. Discovering the programs that are still growing, and moving early, matters more in a contracting year than in an expanding one. That is the problem Granted exists to solve.
Methodology & sources
- Data source
- USAspending.gov federal financial-assistance awards, as mirrored in Granted’s
federal_awardsdatabase. The universe is grant-type assistance only — award/assistance types 02 (block), 03 (formula), 04 (project), and 05 (cooperative agreement). No loans, direct payments, or contracts. Every one of the 687,607 FY2024 and 636,572 FY2025 action rows is a grant-type award (0 non-grant rows). - Fiscal year is derived from the action date
- Federal fiscal years run October 1 – September 30. FY2024 = actions dated 2023-10-01 through 2024-09-30; FY2025 = 2024-10-01 through 2025-09-30. We do not use the labeled fiscal-year field: it misfiles October-dated transactions into the prior year and reads FY2025 roughly 15% low. Deriving the year from each action’s date is what makes our totals reconcile to USAspending’s official spending-over-time figures.
- Net obligations
- Figures sum
federal_action_obligation, i.e. net obligations: new obligations minus downward adjustments (de-obligations). We report the de-obligation drag separately (-$81.5B in FY2025). Positive-only gross obligations were $1.32T in FY2025. - Medicaid, agencies, and geography
- “Medicaid” is CFDA 93.778 (Medical Assistance Program). Agency is the awarding department; state is the recipient organization’s location. Because place-of-performance is not populated, national organizations inflate their headquarters state — most consequentially the Greenhouse Gas Reduction Fund grantees in Maryland and DC, whose FY2025 drop is a national program unwind, not a local one. It is annotated as such above.
- Reproducibility
- Every number on this page is generated by a committed analysis script (
scripts/research-studies/two-speed-grant-economy/analyze.py), which prints the verbatim SQL for each query. The downloadable CSV lists all 51 jurisdictions with their FY2024 and FY2025 totals, year-over-year change, and Medicaid split. See our data methodology for how Granted sources and maintains this data.
Free to cite and republish with attribution to Granted AI (grantedai.com/research/two-speed-grant-economy) under CC BY 4.0. Questions or corrections: nathan@grantedai.com.