Five Democratic-led states are suing the Trump administration for freezing their share of federal food, housing and child care assistance dollars, saying officials failed to justify the sweeping actions that could strip billions in aid from needy families.
New York, along with California, Colorado, Illinois and Minnesota, asked for a temporary restraining order that would allow them to continue receiving the funds, in a lawsuit filed Thursday evening with the United States District Court for the Southern District of New York.
The states argued that the Administration for Children and Families, which is within the Department of Health and Human Services, provided no evidence of fraud and acted illegally by enacting sanctions within the three welfare programs without following processes laid out by law. The administration wrote to the states earlier this week that the freeze was necessary to prevent “potential” fraud but didn’t detail what it meant, according to letters viewed by The Washington Post.
“I will not allow this administration to play political games with the resources families need to help make ends meet,” New York Attorney General Letitia James (D) said in a statement.
State officials and child advocates have said the funding freeze would wreak havoc on families relying on child care aid and could cause ripple effects if parents are forced to quit their jobs to care for children or day care centers shut down permanently.
Minnesota was already in the administration’s crosshairs amid investigations into billions of federal dollars authorities say were fraudulently claimed by individuals and groups purporting to help the state’s low-income population. HHS broadened its crackdown this week, saying nearly $2.4 billion in child care grants have been frozen to the five states, as well as $7.35 billion in temporary grantsfor needy families and $869 million in social services funds. These programs help cover child care, housing, food and home utility costs for families with low incomes.
Democratic leaders in those states blasted the move as politically motivated. Before the lawsuit was filed Thursday, New York Gov. Kathy Hochul (D) told reporters that the administration is “coming after Democratic governors, five of us, for no reason at all.”
“I want them to know this, that you may think you’re punishing me as a Democrat, but this is a county program,” she said, referring to safety net programs in New York partly funded with federal dollars. “We are simply the pass-through. The money goes to providers selected by the counties. They run this.”
HHS spokesman Andrew Nixon cited “serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs” without detailing what prompted the actions. He specifically invoked Democratic-led states and governors, saying they’ve allowed a “massive amount of fraud to occur under their watch.”
Under the freeze, the states must submit justification and receipts before being able to collect funds from any of the programs. The administration wrote in letters to the states that the freeze wouldn’t be lifted until they put in place more verification measures to ensure the funds are being used properly for eligible recipients.
A letter from HHS’s Administration for Children and Families to Colorado said the administration is committed to “rooting out fraud” and expressed concern that Colorado is providing “illegal aliens” government benefits.
Fraud investigations into the three programs targeted by the administration are typically handled by states, former HHS officials said. New York’s Office of the Welfare Inspector General reported it secured nearly $600,000 in fraud-related restitution in 2024, for example.
The administration froze child care funding to nearly a dozen day care facilities in Minnesota in late December after a viral video alleged they were collecting funds without caring for children — claims the state has rebutted. Federal prosecutors have charged 92 people with committing fraud in other, Medicaid-funded programs in the state.
All five states involved in the lawsuit filed Thursday are among more than two dozen states that previously sued the Trump administration over withholding other federal funds including for education, disaster relief and public health, arguing the actions jeopardize critical services.
Joanna Slater contributed to this report.
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