By Lucretia Hughes
HARTWELL, Ga. — The Trump administration is expanding federal oversight of child care payments and warning states that failure to report immigrants known to be unlawfully present could jeopardize billions of dollars in federal welfare funding.
The administration says the actions are intended to prevent fraud, verify that taxpayer-funded services are being delivered and ensure benefits go only to eligible recipients. Democratic-led states and civil rights organizations have challenged portions of the initiative, arguing that the federal government has exceeded its authority and could disrupt assistance for eligible families.
The actions involve two separate policies, and some claims circulating online overstate what the administration has done.
The Department of Health and Human Services announced in January that it was rescinding Biden-era rules requiring states to pay child care providers based on enrollment rather than verified attendance.
Under the changes, states may once again calculate payments using actual attendance, pay providers after services are delivered and use parent-directed vouchers instead of favoring guaranteed contracts with providers.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” HHS Deputy Secretary Jim O’Neill said.
HHS also activated its “Defend the Spend” verification system nationwide. The White House said child care payment requests could require documentation such as a written justification, receipt or photographic evidence before federal money is released.
The changes are intended to prevent providers from billing the government for children who are enrolled on paper but are not receiving care — cases sometimes described as “ghost children.”
However, HHS did not impose one universal rule requiring every provider nationwide to submit daily attendance records. Its rule change allows states to use attendance-based billing, while the federal verification system requires supporting documentation for payment requests.
HHS initially froze access to more than $10 billion in child care and family-assistance funding for California, Colorado, Illinois, Minnesota and New York. The money involved the Child Care and Development Fund, Temporary Assistance for Needy Families and Social Services Block Grant.
Democratic officials called the action politically motivated and filed a lawsuit. A federal judge temporarily blocked the freeze, and HHS later rescinded it after encountering legal obstacles. The national payment-verification measures continued.
The administration has also increased pressure on states over immigration reporting.
On Sept. 2, the Justice Department’s Office of Legal Counsel withdrew a Clinton-era interpretation of federal welfare law and concluded that every agency within a state participating in Temporary Assistance for Needy Families or Supplemental Security Income must report individuals it knows are unlawfully present to the Department of Homeland Security.
The previous interpretation limited that duty primarily to the agencies administering those welfare programs.
“States that accept TANF funding must abide by federal law, and failure to comply may lead to serious consequences, including loss of program funding,” Deputy Assistant Attorney General Joshua Craddock said.
All 50 states, Washington, D.C., and several U.S. territories participate in the programs. Annual federal TANF grants exceed $16.4 billion.
The opinion is binding on federal agencies but is not a new act of Congress. It could face legal challenges from states that restrict cooperation with federal immigration authorities.
Despite claims circulating on social media, the administration did not immediately freeze every welfare payment allegedly going to an illegal immigrant.
Immigrants without lawful status are already generally ineligible for TANF and SSI. The Justice Department’s new position concerns a state’s obligation to share information with DHS and the potential loss of broader program funding if the state refuses.
The distinction matters because cutting money from an entire state program could affect eligible American citizens, lawful residents and children living in mixed-status families — not only people unlawfully present.
Supporters describe the policies as basic financial accountability: verify attendance, document expenses, report ineligible recipients and stop payments when fraud is discovered.
Opponents question whether the executive branch can threaten funding appropriated by Congress without providing evidence of fraud or following the required administrative process.
Fraud should not be tolerated, regardless of who commits it or which political party controls a state. Taxpayer money designated for child care and struggling American families must reach the people legally entitled to receive it.
But accountability also requires accuracy. The administration has strengthened verification requirements and threatened noncompliant states with funding consequences. It has not imposed an immediate nationwide freeze on every welfare payment connected to an immigrant.
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