By Ginika Igboke
The Trump administration has moved to freeze roughly $10 billion in federal funding for child care and related social service programs in five states, citing concerns about fraud and misuse of taxpayer dollars, a federal official said on Jan. 6.
According to officials at the Department of Health and Human Services (HHS), approximately $7 billion in funding tied to the Temporary Assistance for Needy Families (TANF) program has been put on hold. TANF provides federal support to states for programs that assist low-income families with basic needs, employment preparation, and family stability.
In addition to the TANF funds, another $3 billion has been frozen from the Child Care and Development Fund and other social services grants. The Child Care and Development Fund helps subsidize child care for about 1.4 million children from low-income families nationwide, allowing parents to work or pursue education while ensuring access to care.
Andrew Nixon, a spokesman for HHS, said the decision reflects a broader effort by the administration to ensure accountability and prevent abuse within federally funded programs. He said the freeze targets states where officials believe oversight has been insufficient.
“For too long, Democrat-led states and governors have been complicit in allowing massive amounts of fraud to occur under their watch,” Nixon said in a written statement. “Under the Trump administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure these states are following the law and protecting hard-earned taxpayer money.”
The funding freeze applies to California, Colorado, Illinois, Minnesota, and New York. Press offices for the governors of those states did not immediately respond to requests for comment.
The action follows a series of recent steps by HHS aimed at tightening controls over child care and family assistance programs. About a week earlier, Deputy HHS Secretary Jim O’Neill announced new requirements for all payments issued by the HHS Administration for Children and Families, which oversees TANF and related programs. At that time, HHS also froze certain child care payments specifically to Minnesota.
O’Neill cited reports of widespread daycare fraud in Minnesota, saying his department had demanded an audit of daycare center records from Gov. Tim Walz. The reports alleged that some providers billed the state for children who were not actually receiving care.
Walz recently announced that he would not seek reelection, saying in part that he wanted to focus on defending the state against “criminals who prey on our generosity and the cynics who prey on our differences.”
On Jan. 5, HHS also rescinded several child care regulations, including a rule that required states to pay child care providers before care was delivered. O’Neill said such policies increased the risk of fraud by basing payments on enrollment paperwork rather than actual attendance.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” O’Neill said in a statement. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”
Administration officials said the funding freeze will remain in place while compliance reviews and audits are conducted, and that funds could be restored once states demonstrate stronger safeguards and adherence to federal requirements.
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