The easy solution is to just reduce the resolution and scope of the data to the degree it is absolutely necessary. The census exists to inform representation decisions. All other concerns are addons. You can have all the data on the county or voting district level and strip data as you increase your resolution, to the point you only keep population number at the neighborhood, block level.

Knowing the racial, ethnic and socioeconomic background of the residents of a single building block is only useful to discriminate against them.

Demographic information is useful for medical, financial, educational, and so many other items.

The current admin doesn’t need it to discriminate, you can just access cameras and license plate readers and target easily that way.

The purpose is to scare people into misstating or obscuring data to reduce total house representation for an area. It’s to win votes, there are much better ways to do all these things than use this data, but effecting the vote with limited impact is a huge money savings.

There are plenty of other uses - knowing where to build stores to serve your target market, predicting possible pandemic vulnerabilities, etc.