Darren Lyn
06 January 2026•Update: 06 January 2026
HOUSTON, United States
The Trump administration announced Tuesday it is halting $10 billion in federal funding to five Democratic states after allegations of fraudulent child care programs, according to media reports.
The Health and Human Services (HHS) Department said it will freeze the money in California, Colorado, Illinois, Minnesota and New York.
Those states will lose $7 billion for the Temporary Assistance for Needy Families program, about $2.4 billion for the Child Care Development Fund and nearly $870 million for social services grants that benefit children.
"For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch," HHS spokesperson Andrew Nixon said in a 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 Trump administration decided to halt funding after the HHS announced last week that it froze federal child care funding in Minnesota due to "blatant fraud" in public-assistance programs.
More than 90 people face federal charges as a result of fraud schemes uncovered in that state dating to 2021.
Prosecutors said the scandal started with a $250 million coronavirus-era scheme involving the Feeding Our Future nonprofit, which was accused of stealing from the Federal Child Nutrition Program.
That investigation has led to federal prosecutors uncovering "large-scale fraud" in a housing program for seniors and people with disabilities, and a program that provides services to children with autism.
Officials estimate the total amount of fraud in Minnesota could reach $9 billion.
Trump is leading his attack against his Democratic political foe, California Gov. Gavin Newsom, saying that California is "more corrupt" than Minnesota, even though the president has not provided evidence of wide-scale fraud in that state's social services programs.
Federal investigations are also underway in New York, Illinois and Colorado, even though there is no evidence of sweeping fraud schemes in social services in those states.
Democrats have accused Trump of targeting Democratic-led states as a political maneuver to withhold money already approved by Congress.
During last year's historic government shutdown, Trump paused billions of dollars in federal spending in Democratic states for infrastructure and climate projects, and slashed disaster preparedness grants.
