The U.S. Department of Health and Human Services has frozen $10 billion in funding for welfare programs in California, Colorado, Illinois, Minnesota, and New York amid concerns over fraud. Officials are investigating whether benefits are being improperly directed to non-citizens. The move affects key programs providing childcare and assistance to low-income families.
The Department of Health and Human Services (HHS) announced on Monday that it would pause funding for the Child Care Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and Social Services Block Grant (SSBG) programs in five Democratic-led states: California, Colorado, Illinois, Minnesota, and New York. This action impacts a total of $10 billion, including $7.35 billion in TANF funds, $2.4 billion in CCDF funds, and $869 million in SSBG funds, according to reports from the New York Post.
HHS spokesman Andrew Nixon stated, “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.” The states received formal notification via letters on Monday as part of an ongoing probe into whether benefits are being illegally funneled to non-citizens.
The CCDF provides financial assistance to low-income families for childcare while they work or attend school, through a federal-state partnership. TANF offers cash aid for food, housing, energy, and childcare to needy families, administered by states. The SSBG allows states to allocate funds to various welfare initiatives.
New York Democratic Senator Kirsten Gillibrand criticized the freeze as politically motivated, writing on X: “Trump is threatening to freeze child care funding in New York and targeting our children for political retribution. It’s immoral and indefensible.”
This follows recent scrutiny of specific states. Last week, HHS halted all childcare payments to Minnesota over allegations of millions in taxpayer dollars going to fraudulent daycares over the past decade. On Tuesday, President Donald Trump posted on Truth Social about California: “California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible??? The Fraud Investigation of California has begun.”
The administration aims to protect federal funds, but critics argue the measures harm vulnerable families without proven widespread fraud.
