The Trump administration’s push to restrict certain federal safety-net payments to five Democratic-led states has been paused after a judge stepped in to protect the status quo while the case unfolds. The Department of Health and Human Services told the states that it was freezing money in programs that subsidize child care for low-income families, provide cash assistance and job training, and support other social services.
HHS said it was acting to root out fraud, according to letters described in the lawsuit filings and subsequent reporting. Those letters asserted that the government had “reason to believe” each targeted state was “illicitly providing illegal aliens” with benefits, and HHS did not spell out the basis for the suspicions. The administration also directed states to provide extensive information about program beneficiaries and related providers—requirements that state officials argued went beyond what was needed and raised practical hurdles.
The federal government’s freeze covered the Child Care and Development Fund, which subsidizes child care for 1.3 million children from low-income families, the Temporary Assistance for Needy Families program, and the Social Services Block Grant, according to HHS statements reported by the Associated Press. State officials said in their lawsuit that the targeted programs deliver more than $10 billion a year to the five states combined. New York officials said that money supports homeless shelters, adoption, child welfare investigations and other services, and that losses could create a budget hole of hundreds of millions this month.
A key part of the administration’s effort, as described in the reporting, involved asking states to prepare to turn over personal identifying information about beneficiaries since at least 2022, along with details about subcontractors and program providers dating back to 2019. For child care, HHS requested attendance records but did not seek personal information for children or their families, while the administration’s broader approach has included pushing to collect similar data for beneficiaries of other programs.
In addition to the freeze, the administration also imposed new access hurdles for the remaining 45 states that receive allocated child care funds. Those states must verify enrollment and attendance in child care centers and submit what the administration described as “a strong justification for the use of funds that aligns with” the purpose of the child care program before receiving distributions, according to the reporting.
The court intervention came after the five states challenged the freeze, and Judge Arun Subramanian—nominated to the bench by President Joe Biden—halted the restriction for at least 14 days. Subramanian said the states met a legal threshold “to protect the status quo” while legal arguments proceed, and his decision did not rule on whether the freeze is lawful on the merits. Representatives for the administration did not receive a merits ruling in that initial order, but the timetable effectively pauses the federal action during the next phase.
Outside experts cited in the reporting said delays and new reporting requirements could pressure the child care provider system even if states eventually regain access to the money. Ruth Friedman, a senior fellow at The Century Foundation who oversaw child care programs for the Biden administration, said on a reporters’ call that some information the federal government requested could be a challenge because the federal government does not currently require it. Elliot Haspel, a senior fellow at Capita, said even eventual payment could come too late for providers, warning that delays could lead to layoffs or closures at child care centers and harm families that pay full cost and families that rely on subsidies.
Minnesota was singled out for especially urgent steps in the administration’s overall approach, amid heightened scrutiny of fraud allegations affecting child-related services. Reporting described a pro-Trump influencer video posted last month claiming day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud. The reporting also noted that conservative news and commentary outlets amplified earlier social service fraud allegations involving Somali defendants, and that federal prosecutors said the nonprofit group Feeding Our Future stole $250 million from a program meant to feed children in need during the COVID-19 pandemic—leading to charges and convictions described in the article.
Minnesota officials said they were told that child care providers’ federal money was on hold and instructed to turn over records on child care providers, state oversight efforts and program finances by Friday. In a letter notifying Minnesota that Social Services Block Grants would be on hold, the administration asserted that “Your office has not demonstrated that the state has effective mechanisms in place to prevent fraud.” Gov. Tim Walz defended the state’s response and said Minnesota was taking aggressive action to prevent further fraud. In a separate action reported in the story, Agriculture Secretary Brooke Rollins announced the administration would freeze about $130 million a year in funding from her agency to Minnesota, again citing what the administration described as the state’s inability to stop fraud schemes.
As the case continues, the administration’s stated focus remains fraud detection and program integrity controls, while the states’ argument centers on the legality and consequences of pausing access to federal funds. The judge’s order keeps the frozen money from staying locked away for at least the next two weeks, but it does not resolve what will happen after the court weighs the underlying dispute.
This story has been updated to correct the name of the former Minnesota nonprofit group Feeding Our Future.