A federal judge has ordered the Trump administration to keep child care and other social service funds flowing to five Democratic-controlled states—California, Colorado, Illinois, Minnesota and New York—for at least two more weeks, extending a short-term court order that was set to lapse. The ruling came Friday from U.S. District Judge Vernon Broderick, who said he would later decide whether the money should remain in place while the legal challenge proceeds.
Broderick’s order continued a temporary restraining order that had blocked the federal government from holding back the money. The temporary measure had been issued earlier in January and was scheduled to expire that day, according to the court proceedings described in the Associated Press report.
At the center of the dispute were requirements laid out by the U.S. Department of Health and Human Services for the five states to regain access to federal dollars tied to programs aimed at low-income families. The Department sent notices in early January, saying it would require “justifications” for the spending and additional documentation that included beneficiary-level information for some programs.
The affected programs include the Child Care and Development Fund, which provides subsidies for child care, and the Temporary Assistance for Needy Families program, which provides cash assistance and job training. The notice also covered the Social Services Block Grant, described in court filings as a smaller fund supporting a variety of social service programs.
The states, through their lawyers, said they receive more than $10 billion a year through those programs and argued that the services are essential for vulnerable families, including shelter costs in New York City. In court, state attorneys also pushed back on the federal government’s requested timeline and scope of data, saying compliance would be impractical.
During Friday’s hearing, federal lawyers said the administration’s decision was linked to concerns about fraud, which they described as “reason to believe” the states were granting benefits to people in the country illegally. Mallika Balachandran, a federal government lawyer, told the judge that the concerns were raised by media reports, though she said she did not know which reports were involved.
Broderick pressed the government’s explanation, asking why the federal government made the process to access money harder before any wrongdoing had been found. He said the situation appeared to him to be “the cart before the horse,” according to the account of the hearing.
State lawyers argued the federal action was aimed at political opponents rather than fraud verification. They said the move was intended to damage Trump’s political adversaries, and they pointed to related federal actions that they said were occurring around the same time, including additional hurdles for Minnesota and expanded requests that states explain how they use child care funds.
In court filings, the states argued that what they described as a broad funding freeze did not follow the law. They said Congress set procedures for identifying noncompliance or fraud by recipients, and they argued the administration had not used those processes. They also said the administration’s demand for personal data on an accelerated schedule—where required starting in 2022—amounted to an “impossible demand on an impossible timeline.”
State lawyer Jessica Ranucci, arguing on behalf of the five states from New York’s attorney general’s office, told the judge she was informed only about a half-hour before the hearing that the government had been developing additional information about what the states needed to provide. She said the government had not previously mentioned that development in court filings.
The federal government, for its part, objected to the states’ framing of the actions as a “funding freeze.” In a court filing, the administration said states could receive funding going forward if they provide requested information and if the federal government finds them to be in compliance with anti-fraud requirements. The administration also noted that it has continued to provide some funding.
While federal lawyers argued the states could move forward by meeting the documentation requirements, state attorneys said that most of the funding would not become accessible until after the restraining order was in place. The case is being litigated as the government continues to face challenges over its approach to withholding or delaying federal assistance tied to fraud concerns.