Trump cuts off $10B in social services, child care funding to Democrat-led states over fraud fears

WASHINGTON, DC: President Donald Trump’s administration is cutting off more than $10 billion in social services and child care funding for several Democrat-led states over concerns that benefits were fraudulently provided to non-citizens, officials told the New York Post.

The Department of Health and Human Services (HHS) is set to freeze funding from the Child Care Development Fund (CCDF), the Temporary Assistance for Needy Families (TANF) program, and the Social Services Block Grant program.

HHS freezes billions in child care funds over fraud concerns

Officials told the outlet that at least $7.35 billion in Temporary Assistance for Needy Families (TANF) funding will be blocked from going to California, Colorado, Illinois, Minnesota, and New York.

In addition, nearly $2.4 billion in CCDF funding will be frozen for those same states. Another $869 million from the Social Services Block Grant program will also be withheld from all five.

The funding cutoffs were to be announced through letters sent to each state on Monday, January 5, citing concerns that benefits were fraudulently provided to non–US citizens.

Meanwhile, the HHS Office of Inspector General found more than six years ago that New York City had incorrectly billed the federal government for more than $24.7 million in child care subsidies.

Following the administration’s decision, Senator Kirsten Gillibrand (D–NY) sharply criticized the move. Gillibrand said in a statement, “To use the power of the government to harm the neediest Americans is immoral and indefensible.”

“This has nothing to do with fraud and everything to do with political retribution that punishes poor children in need of assistance. I demand that President Trump unfreeze this funding and stop this brazen attack on our children,” the senator added.

The HHS had earlier sent letters in December 2025 to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey asking whether the billions of taxpayer money helped unlawfully "fuel illegal and mass migration", The New York Post had reported. 

Those letters were followed by probes launched by the Department of the Treasury and the House Oversight Committee into a growing fraud scandal involving several nonprofits linked to the Somali community in the Twin Cities.

According to the Pew Research Center, approximately 130,000 undocumented migrants lived in Minnesota as of 2023, an increase of about 40,000 since 2019, accounting for roughly 2 percent of the state’s population.

Trump roasts Tim Walz on national TV

President Donald Trump criticized Tim Walz while speaking to reporters aboard Air Force One on Sunday, January 4, tying the Minnesota governor to what he described as massive fraud involving state-run federal programs. 

Trump’s remarks came amid ongoing investigations into the alleged misuse of federal funds in Minnesota, particularly within social services and child nutrition initiatives.

The president cited figures running into the billions and repeatedly pointed to Somali groups as central to the alleged schemes. When asked about the investigations, Trump slammed Walz and offered a blunt assessment of the governor.

"This very stupid, low-IQ governor. He’s a very stupid man because you know I had a campaign against him with JD. And he’s a stupid man, and he’s a corrupt politician," Trump said, while referencing debates between Walz and JD Vance back in 2024.

The president further linked Walz to alleged financial losses tied to Minnesota’s administration of federal programs.

“The Somalians are ripping off our country to the tune of, looks like $19 billion, but that’s only what they can find. So usually when you’re looking at 19, that would mean it could be 50. But the numbers are astronomical,” he said.