In a major move impacting social welfare programs, the administration of former US President Donald Trump has ordered a freeze on more than $10 billion in federal funding designated for child care and family assistance in five states led by Democratic governments. This information was first reported by the New York Post and later confirmed by the Office of Management and Budget to Axios.
Which Funds Are Blocked and Which States Are Affected?
The funding freeze targets three key federal programs: the Child Care Development Fund (CCDF), the Temporary Assistance for Needy Families (TANF) program, and the Social Services Block Grant program. The action directly impacts the states of California, Colorado, Illinois, Minnesota, and New York.
Officials state that at least $7.35 billion in TANF money will be withheld from these five states. Furthermore, nearly $2.4 billion from the CCDF and another $869 million from the Social Services Block Grant will be blocked from reaching these states.
Why Did the Trump Administration Take This Step?
The decision to halt the funds stems from significant concerns within the administration about potential fraud and the misuse of taxpayer money. Officials cited worries that benefits were being improperly distributed to non-US citizens and undocumented immigrants.
This development gained momentum following a viral YouTube video posted the day after Christmas, which claimed to show empty child care centers in Minnesota. The administration has also pointed to older audits, including one from the HHS Office of Inspector General more than six years ago, which found that New York City had improperly billed the federal government for over $24.7 million in child care subsidies.
In December, the Department of Health and Human Services (HHS) sent letters to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey, questioning whether federal dollars were being used to unlawfully "fuel illegal and mass migration." Axios reported that the White House used reports of social services fraud in Minnesota to justify threatening child care funding across the nation.
Wide-Ranging Impact on Families and Services
The funding freeze is expected to have severe and immediate consequences for low-income families, social service providers, and state budgets. Child care providers are now preparing for a sharp slowdown in funds, with potential cuts that threaten their very ability to operate and stay open.
This could create a domino effect, as millions of working parents rely on these subsidized child care services to be able to go to their jobs. The instability threatens both family livelihoods and the child care industry itself.
New York Democrats have strongly condemned the move. Senator Kirsten Gillibrand accused the Trump administration of engaging in political retaliation. "Trump is threatening to freeze child care funding in New York and targeting our children for political retribution. It’s immoral and indefensible," she wrote in a post on X (formerly Twitter).
In a separate statement, Gillibrand argued, "This has nothing to do with fraud and everything to do with political retribution that punishes poor children in need of assistance." She demanded the administration abandon its plans, warning it would hurt children and low-income families across her state.
