In a significant move, the Trump administration announced on Tuesday that it is freezing $10 billion in federal grant funds intended for critical child care and family assistance programs across five states. This decision arises from serious concerns regarding widespread fraud within state-administered programs. The states directly affected by this funding freeze include California, Colorado, Illinois, Minnesota, and New York, all of which are governed by Democratic leaders.
The freeze impacts three major programs overseen by the U.S. Health and Human Services (HHS) Department's Administration for Children and Families. These programs include the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant (SSBG). The announcement follows a day after Minnesota Governor Tim Walz withdrew his candidacy for a third term, amid mounting political pressure stemming from significant fraud allegations in social service programs, particularly in child care services, which a federal prosecutor claims have cost over $9 billion.
Deputy HHS Secretary Jim O'Neill emphasized the importance of integrity in these programs, stating, "Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose." He added that this funding freeze reflects the administration's commitment to program integrity, fiscal responsibility, and adherence to federal requirements.
As part of this funding freeze, more than $7.3 billion in TANF funds, nearly $2.4 billion in CCDF funds, and approximately $840 million in SSBG funding have been suspended. This action has drawn significant criticism from various state leaders. For instance, Illinois Governor JB Pritzker condemned President Donald Trump, stating, "Rather than making it more affordable for families, Trump is stripping away child care from those just trying to go to work." He expressed concerns that thousands depend on these programs, putting their livelihoods at risk.
New York Governor Kathy Hochul also reacted strongly to the funding freeze, tweeting, "Trump is threatening to freeze $10 billion in child care funding in blue states to make life harder and more expensive for kids and families. It's vindictive. It's cruel. And we'll fight it with every fiber of our being."
In a related development, HHS announced on Monday that it is rescinding several child-care regulations implemented during the Biden administration. These rules had required states to compensate providers before verifying attendance and prior to the delivery of care. The rollback aims to restore oversight and reduce the risk of waste, fraud, and abuse in federally-funded state child care programs, including those currently under investigation in Minnesota. Last week, HHS had already frozen all federal child care funding for Minnesota, which amounts to about $185 million each year.
This funding freeze and the accompanying changes in policy reflect the ongoing tension between federal and state leadership on issues of child care funding and program integrity. As these developments unfold, the implications for families relying on these essential services remain a critical concern.