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Trump administration says it’s withholding social safety net money from 5 states over fraud concerns

The Trump administration froze $10 billion in aid to five Democratic-led states citing fraud concerns despite limited evidence beyond Minnesota's case, impacting programs aiding nearly 1 million families.

  • On Tuesday, the Trump administration said it is withholding roughly $10 billion in federal social services and child-care funds from California, Colorado, Illinois, Minnesota and New York, the Department of Health and Human Services confirmed.
  • Following fraud probes in Minnesota that began after a viral allegation, the freeze builds on a Minnesota scandal involving alleged fraud at day-care centers that prompted earlier pauses in federal child-care funding.
  • HHS detailed the funding categories affected, noting $2.4 billion from the Child Care and Development Fund, $7.35 billion from Temporary Assistance for Needy Families, and $869 million from the Social Services Block Grant.
  • Immediate effects include advocates warning the freeze will disrupt aid for low-income families with children and strain child-care providers, while state governors including New York Governor Kathy Hochul prepare legal challenges.
  • Critics argue the freeze targets the five states as political retribution and lacks evidence beyond Minnesota, while HHS says verification could take months.
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The New Republic broke the news in on Monday, January 5, 2026.
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