Trump freezes $10B in funding to 5 Democrat-led states for child care, social services: What we know so far

THE Trump administration is freezing more than $10 billion in federal child care and social services funding to five Democrat-led states, officials told The New York Post on Monday. The information was also confirmed by the Office of Management and Budget (OMB) to Axios.

According to the report, the US Department of Health and Human Services (HHS) will freeze taxpayer funding from the Child Care Development Fund (CCDF), the Temporary Assistance for Needy Families (TANF) programme and the Social Services Block Grant.

At least $7.35 billion in TANF money funding would be withheld from five states – California, Colorado, Illinois, Minnesota, and New York.

Nearly $2.4 billion will be blocked from the CCDF funding, while another $869 million from the Social Services Block Grant coffers will be kept from all five states, The Post reported.

Why was the funding halted?

The funding is reportedly being halted amid concerns that benefits were being fraudulently distributed to non-US citizens.

Meanwhile, Axios reported, citing an OMB official, that the hold on funds is due to fraud and giving money to undocumented immigrants.

The development came in the backdrop of a viral YouTube video that claimed to show empty child care centres in Minnesota. The clip was posted the day after Christmas.

According to the NY Post, the HHS Office of Inspector General reportedly found, more than six years ago, that New York City improperly billed the federal government for more than $24.7 million in child care subsidies.

HHS also previously sent letters in December to Minnesota Gov. Tim Walz and Minneapolis Mayor Jacob Frey, asking whether the billions of taxpayer dollars helped unlawfully “fuel illegal and mass migration,” The Post first reported.

Meanwhile, Axios reported that the White House cited reports of social services fraud in Minnesota as a reason to threaten funding for child care nationwide.

Whom will it affect?

The move is likely to have wide-ranging effects on low-income families, social services, and state budgets.

Child care providers are bracing for a slowdown in funds and the possibility of cuts that threaten their ability to operate, Axios reported.

That could lead to wider issues, as millions of parents rely on child care to get to their jobs.

New York Democrats argued that it would harm families who rely on child care assistance. Sen. Kirsten Gillibrand, D-NY, accused the Trump administration of using the issue for political retaliation and warned it would hurt children and low-income families across the state.

"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.

Gillibrand said in a statement shared on X, "This has nothing to do with fraud and everything to do with political retribution that punishes poor children in need of assistance."

"I’m demanding the administration abandon any plans to freeze this funding and stop hurting New York families," she said.