The Trump administration has frozen approximately $10 billion in federal grant funds for key child care and family assistance programs in five Democratic-led states, citing "serious concerns about widespread fraud." The affected states are California, Colorado, Illinois, Minnesota, and New York.

The action targets three programs administered by the U.S. Department of Health and Human Services: the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant (SSBG). The freeze allocates as follows: over $7.3 billion in TANF funds, nearly $2.4 billion in CCDF funds, and roughly $840 million in SSBG funding.

Deputy HHS Secretary Jim O'Neill stated the move reflects a commitment to "program integrity, fiscal responsibility, and compliance with federal requirements." He added, "Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully."

The decision follows recent political fallout in Minnesota, where Governor Tim Walz recently ended his bid for a third term amid a sprawling fraud scandal in social service programs. A federal prosecutor has estimated fraud in the state's child-care services alone exceeded $9 billion. Last week, HHS froze all federal child care funding for Minnesota, totaling about $185 million annually.

Governors of the targeted states denounced the move as politically motivated and harmful. Illinois Governor JB Pritzker accused Trump of "stripping away child care from those just trying to go to work," while New York Governor Kathy Hochul called the action "vindictive" and "cruel."

The freeze coincides with an HHS announcement on Monday rescinding several child-care rules implemented under the Biden administration. The department argued those rules, which allowed states to pay providers before verifying attendance, "weakened oversight and increased the risk of waste, fraud and abuse."