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The Trump administration issued a blunt notification to five major blue states on Tuesday. Officials are freezing $10 billion in child care and social service funds effective immediately.
The move targets Minnesota, New York, California, Illinois, and Colorado. The Department of Health and Human Services cited concerns of “systemic fraud” and misuse of taxpayer dollars.
HHS spokesperson Andrew Nixon was clear about the administration’s position. “For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch,” Nixon stated.
The freeze hits three major programs that provide a lifeline to low-income families. This includes $7.3 billion for Temporary Assistance for Needy Families (TANF) and $2.4 billion for the Child Care Development Fund (CCDF).
The administration is also withholding $869 million from the Social Services Block Grant (SSBG). These programs are essential for child care, cash assistance, and job training for at-risk households.
HHS is now demanding extensive data from these five states before the “spigot” is turned back on. Governors must submit names, Social Security numbers, and birth dates for all recipients.
The letter to Illinois officials highlighted even deeper concerns. The agency believes the state is “illicitly providing illegal aliens with CCDF benefits intended for American citizens.”
This crackdown follows a series of viral investigations into “ghost” daycare centers in Minnesota. YouTuber Nick Shirley recently exposed facilities that collected millions in funding while appearing completely empty.
One Minnesota center reportedly had its license revoked years ago but continued to collect taxpayer money. Another center, Intisar, allegedly lost its license in 2021 yet remained a beneficiary of state programs.
“We have a responsibility to protect taxpayer dollars,” said Alex Adams, Assistant HHS Secretary. “When there are credible concerns about fraud or misuse, we will act.”
The funding freeze has already triggered a fierce backlash from Democratic governors. New York Governor Kathy Hochul called the move “vindictive” and a “frontal assault on children.”
Governor JB Pritzker’s office in Illinois characterized the decision as “politically motivated.” Despite the criticism, the administration insists the funds will remain frozen until a full review is completed.
States have until January 20 to comply with the new data requirements. Failure to do so could result in permanent closures for child care providers across the affected states.