When the Trump administration canceled more than $7.5 billion in Biden-era federal grants for clean energy projects in October, it framed the move as an urgent corrective to protect taxpayer funds from waste.

But it wasn’t true.

In little-noticed court documents, federal officials acknowledged this month that they had terminated the funding “based solely” on political criteria, targeting projects in states that were represented by Democrats and had voted for Kamala Harris, the party’s presidential nominee, in the 2024 election.

The admission showed how President Trump has weaponized the provision of federal education, energy, health, housing and infrastructure aid in his second term. Far from rooting out the sort of misspending that Mr. Trump sees as rife in Washington, the White House has instead sought to leverage the budget as a tool to assist its allies — or as a cudgel to hurt the president’s foes.

The saga illustrates the stakes as the Trump administration is completing a set of rules that would provide the president even greater control over more than $1 trillion in annual federal grants. To critics, the new regulation would only make it easier for Mr. Trump to strike wider tranches of congressionally approved funding over political differences.

“The risk that the Trump administration is willing to go to extreme lengths to politicize grant-making is not a hypothetical,” said Devin O’Connor, a senior fellow at the Center on Budget and Policy Priorities, a left-leaning group. He previously served in the Biden administration.

“If they are willing to be that blatant about it,” Mr. O’Connor said of the court filing, “then I think we should take seriously when they put forward a framework that would allow for the extreme politicization of grant-making across all of the federal government.”