The Trump administration has ordered a sweeping pause on roughly $10 billion in federal funding for social services and child care programs in five Democratic-led states, citing concerns about fraud. The decision affects California, Colorado, Illinois, Minnesota and New York, according to confirmations from the Department of Health and Human Services (HHS) and the Office of Management and Budget. The funding freeze is the latest in a series of clashes between the Trump administration and Democratic-led states, following previous pauses on infrastructure, climate and disaster preparedness funding during last year’s government shutdown.
The New York Post was first to report that HHS would withhold the funding that targets programs that support low-income families and children. More than $7 billion is being withheld from the Temporary Assistance for Needy Families (TANF) program, which provides direct cash aid and child care support. An additional nearly $2.4 billion from the Child Care and Development Fund, which helps working parents pay for child care, has also been frozen, along with about $870 million in Social Services Block Grant funding. Federal child care assistance supports an estimated 1.4 million children nationwide.
HHS spokesperson Andrew Nixon said “for too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch. Under the Trump Administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure these states are following the law and protecting hard-earned taxpayer money.”
The move follows a separate decision last week to halt child care funding in Minnesota amid ongoing federal investigations into fraud in public assistance programs. Minnesota has been at the center of several high-profile cases since 2021, including a $250 million COVID-era scheme involving the nonprofit Feeding Our Future and other alleged fraud tied to housing and disability services. Prosecutors estimate that fraud uncovered in the state could ultimately total billions of dollars.
Outside Minnesota, the administration has not presented evidence of widespread fraud in the other four affected states, whose officials say they have received little clarity. The Colorado Department of Human Services told CNN it had not been formally notified of a funding freeze. “Should these funding sources change, we remain committed to supporting our families in Colorado and will continue to advocate for the programs and services that help them thrive,” the department said.
Democrats have sharply criticized the action, arguing it amounts to punishment of political rivals rather than a good-faith effort to address fraud. Sen. Kirsten Gillibrand of New York called the move retaliatory. “To use the power of the government to harm the neediest Americans is immoral and indefensible,” she said, adding, “This has nothing to do with fraud and everything to do with political retribution that punishes poor children in need of assistance.”
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