Child advocates and politicians in five Democratic-led states on Wednesday decried the Trump administration’s move to freeze billions of dollars in child care grants and family assistance, calling it an act of cruel retribution that could do long-term harm to some of the nation’s poorest families.
The Department of Health and Human Services announced Tuesday that it had frozen grants that provide food and child care assistance to low-income residents in New York, California, Colorado, Illinois and Minnesota, saying that it has “serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs” and that the states may be wrongfully providing services to illegal immigrants.
HHS spokesman Andrew Nixon said the agency “identified serious concerns in these five states that warranted immediate action” but did not provide any specific evidence of fraud.
“For too long, Democrat-led states and governors have been complicit and allowing massive amounts of fraud to occur under their watch,” Nixon said.
The multistate funding freeze broadens the administration’s crusade against fraud in government welfare programs, which until now was largely focused on Minnesota. Minnesota Gov. Tim Walz (D) dropped his bid for reelection this week amid intense scrutiny over high-profile welfare fraud investigations in his state that federal prosecutors say have cost taxpayers billions. Last week, the administration paused child care payments to multiple Minnesota day cares following allegations that they improperly collected millions of federal dollars.
The administration also announced late Tuesday that it would conduct an audit of payments sent to 14 Medicaid-funded programs in Minnesota, which are under investigation for fraud, and defer funds based on its findings. Mehmet Oz, the director of the Centers for Medicare and Medicaid Services, said a corrective action plan the agency received last week from Minnesota was “deeply insufficient.”
“If the state cannot get a handle on this fraud, as we find more, we intend to withhold more payments going forward until the state cleans up its act,” Oz said in a video posted to X.
Democratic leaders said the funding cuts were politically motivated.
“Our kids should not be political pawns in a fight Donald Trump seems to have with blue state governors,” New York Gov. Kathy Hochul (D) said, calling the decision “vindictive” and “cruel” and vowing to fight it in court.
In Colorado, Gov. Jared Polis (D) said that “no child should go without food, stability, or opportunity because of punitive federal action” and that the state was “exploring all options to make sure Colorado children and families are supported.”
HHS said nearly $2.4 billion in child care grants have been frozen, as well as $7.35 billion in temporary grantsfor needy families and $869 million in social services funds. Together, these programs help cover child care costs for qualifying low-income families and assist with housing, food and home utility costs.
“This is targeting and hurting families most at need at a time of rising unaffordability in Colorado across the state,” said Stuart Jenkins, the executive director of the Boys and Girls Club in Colorado, where five of its centers would be impacted by the freeze. “It’s very heartbreaking.”
Freezing federal funds to child care providers across an entire state is “unprecedented,” said Ruth Friedman, a senior fellow at the Century Foundation, a progressive think tank, who directed the HHS office that handles child care under the Biden administration. Typically states handle fraud investigations, she said, since they are the ones distributing the funds to providers.
“You don’t harm hundreds of thousands of families and take away their child care assistance based on unproven allegations,” Friedman said.
In Colorado, officials said they received three letters Tuesday evening saying that the administration had put about $300 million in funds that assist thousands of Colorado residents on “restricted drawdown” — including the state’s Temporary Assistance for Needy Families, which provides food and other emergency aid, the Social Services Block Grant program, and the Child Care and Development Fund, which funds the state’s low-income day care program that assists an estimated 27,000 children.
The Trump administration is committed to “rooting out fraud,” the letter from the Administration for Children and Families said. The administration is also concerned that Colorado is providing illegal residents government benefits, the letter said.
Jenkins said that Colorado officials were not certain whether the funding freeze would impact funds already dispersed for the fiscal year and how long the fraud investigation would last.
D’Arla Mezzacapo, the owner of Take-a-Break day care center in Lafayette, Colorado, said that even a delay of a month or two could force her to lay off some of her 32 staffers or shut down the center altogether, leaving parents without child care. About 40 of her 150 children are supported by the state’s low-income day care program, which receives federal funds.
“We would lose $43,000 a month, and we couldn’t stay in business, even if it’s temporary,” she said. “All these children would have to leave care or their parents would have to quit their jobs. … The impact would be tremendous.”
She said it was unlikely that the federal government would uncover any fraud in their highly regulated state program, which requires parents to clock in and out daily, among other measures.
Allegations of day care fraud have become a political flash point among conservatives in recent weeks after a GOP influencer filmed himself visiting federal subsidized day cares in Minneapolis, alleging that they didn’t care for children. The Minnesota Department of Children, Youth and Families said it has confirmed the centers were operating as expected. The agency said it has 55 open investigations into child care fund recipients but didn’t say whether any of the centers in the video are among them.
The allegations come amid a years-long probe in the state of more than a dozen programs funded by Medicaid. Federal prosecutors have charged 92 people and said last month that at least half of $18 billion in federal funds that supported 14 programs since 2018 may have been fraudulent. Many of the fraud defendants are of Somali descent, and Walz has accused Republicans of politicizing the issue and demonizing the Somali immigrant community.
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