Trump Admin Freezes $10 Billion in Child Care Funding for Minnesota, 4 Other States

‘Under the Trump administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes,’ a spokesman said.

The U.S. Department of Health and Human Services at the Hubert H. Humphrey building in Washington on April 28, 2025. Madalina Vasiliu/The Epoch Times

The Trump administration is freezing $10 billion in funds for child care for five states because of fraud concerns, officials said on Jan. 6.

The Department of Health and Human Services (HHS) is freezing $7 billion in funds for the Temporary Assistance for Needy Families plan, which provides funding for programs that help low-income families.

An additional $2.4 billion in funds from the Child Care and Development Fund, a program that funds child care assistance for about 1.4 million children from low-income families across the nation, and $869 million in social services grants are also being frozen.

“For too long, Democrat-led states and governors have been complicit in allowing massive amounts of fraud to occur under their watch,” Andrew Nixon, a spokesman for HHS, told The Epoch Times via email. “Under the Trump administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure that these states are following the law and protecting hard-earned taxpayer money.”

The five states are California, Colorado, Illinois, Minnesota, and New York.

Officials said they’re freezing the funds because of concerns the benefits may have gone to people not eligible for them under federal law, among other possible fraud. The funds will remain frozen until HHS completes a review and determines that states are complying with federal requirements.

“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” HHS Deputy Secretary Jim O’Neill said in a statement. “This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.”

In letters to California Gov. Gavin Newsom reviewed by The Epoch Times, HHS Assistant Secretary Alex Adams said that the Trump administration is concerned by “the potential for extensive and systemic fraud” in the programs. In one letter, he said the concerns were heightened by recent federal prosecutions and allegations of additional fraud, as well as indications that California was illegally providing illegal immigrants with program benefits.

Newsom’s office referred a request for comment to the California Department of Social Services (CDSS).

“The California Department of Social Services administers child care programs that help working families afford safe, reliable care for their children—so parents can go to work, support their families, and contribute to their communities. These funds are critical for working families across California,” Jason Montiel, a spokesman for the department, told The Epoch Times in an email. “We take fraud seriously, and CDSS has received no information from the federal government indicating any freeze, pause, or suspension of federal child care funding.”

Illinois Gov. JB Pritzker said in a statement that he disagreed with the funding freeze.

Press contacts for the other governors did not respond to requests for comment by publication time.

The action comes about a week after O'Neill announced that he was implementing new requirements for all payments from the HHS Administration for Children and Families, which includes the Temporary Assistance for Needy Families program, and frozen child care payments to Minnesota.

O'Neill pointed to reports of alleged day care fraud in Minnesota and said he had demanded an audit of the day care center records from Minnesota Gov. Tim Walz.

Walz recently announced that he would not seek reelection, in part, because he wanted to focus on defending the state against “criminals who prey on our generosity and the cynics who prey on our differences.”

HHS on Jan. 5 also rescinded child care rules, including a rule that mandated that states pay child care providers before care was provided.

“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.”