Since this week, the Trump administration has pressed states to tighten fraud controls on federal social-service programs that include child care subsidies, cash assistance and job training for low-income families with children. According to the U.S. Department of Health and Human Services, the agency froze money for California, Colorado, Illinois, Minnesota and New York under three programs: the Child Care and Development Fund, Temporary Assistance for Needy Families, and the Social Services Block Grant.
The administration’s stated rationale focused on program integrity and fraud concerns tied to “reported problems.” It also sent letters to the states asserting it had “reason to believe” each state was “illicitly providing illegal aliens” with benefits, according to the AP report. State officials said the notices did not spell out the underlying reasons for the suspicions and did not explain why other states were not targeted.
A federal judge halted the freeze for those five states after the states challenged the action in court. In a ruling that did not decide the legality of the funding restrictions, U.S. District Judge Arun Subramanian, nominated to the bench by President Joe Biden, said the states met a legal threshold “to protect the status quo” for at least 14 days while the case proceeds.
At the heart of the administration’s information request is a new push for beneficiary data and detailed oversight records. The administration told states to provide names, Social Security numbers and other personally identifying information of program beneficiaries dating back to at least 2022, as well as information about subcontractors and program providers going back to 2019. For the child care program specifically, the administration requested attendance records but, as described in the report, without personal information for children or their families.
One reported barrier is that federal data requirements could be harder to assemble than states expect. Ruth Friedman, a senior fellow at The Century Foundation who oversaw child care programs for the Biden administration, said on a reporter call this week that assembling some of the requested information could be a challenge because the federal government does not currently require it.
Even beyond the five states under the freeze, the administration imposed additional steps for states to access child care money. The report said the other 45 states must use an online system to verify child care enrollment and attendance at child care centers, then submit what the administration described as “a strong justification for the use of funds that aligns with” the purpose of the program. The administration said it is “implementing strategies and program controls to identify fraud and ensure program integrity,” and described similar “defend the spend” policies tied to changes in the Department of Government Efficiency.
Elliot Haspel, a senior fellow at Capita, a think tank focused on family issues, said that even if states eventually receive the money, delays could still lead to layoffs or closures at child care centers. He warned that long pauses can harm families that pay full cost for care as well as families receiving subsidies, adding: “You can create chaos very quickly,” and “the harm may roll on the longer it happens.”
The report also described how the focus on Minnesota intensified after pro-Trump content circulated allegations about fraud by day care centers operated by Somali residents in Minneapolis. Separately, federal cases have resulted in charges and convictions tied to a nonprofit group that prosecutors said stole $250 million from a program meant to feed children in need during the COVID-19 pandemic, according to the AP account. The Minnesota freeze placed time-sensitive demands on child care providers, with officials telling providers their federal money was on hold and directing them to hand over records by Friday covering child care providers, state oversight efforts, and program finances.
Separately, Brooke Rollins, the agriculture secretary, said the administration would freeze about $130 million a year in funding from her agency to Minnesota, again citing the state’s alleged inability to stop fraud schemes. Gov. Tim Walz defended Minnesota’s response and said the state was taking aggressive action to prevent further fraud, while Walz’s office did not immediately provide a comment in the AP report.
The administration’s actions have raised immediate financial stakes in New York as well. New York officials said the money supports services including homeless shelters, adoption, child welfare investigations and other programs, and that losses could create a budget hole of hundreds of millions this month, the report said.