By Gao Yun
According to officials from the U.S. Department of Health and Human Services (HHS), the Trump administration plans to suspend the disbursement of tens of billions of dollars in federal social service funding to five Democratic-led states, citing serious fraud concerns within the programs.
The official said the move would freeze multiple federal funding streams, including $7 billion for the Temporary Assistance for Needy Families (TANF) program, nearly $2.4 billion for the Child Care Development Fund, and approximately $870 million in social services block grants, primarily serving children. The affected states include Minnesota, New York, California, Illinois, and Colorado.
The New York Post was the first outlet to report that HHS would withhold the funds.
Fraud has persisted for years
HHS spokesperson Andrew Nixon said in a statement that for years, some Democratic-led states have failed to adequately prevent fraud during oversight, putting taxpayer funds at risk.
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He emphasized that the Trump administration is taking steps to ensure federal taxpayer dollars are used only for lawful purposes and will require states to strictly comply with the law to protect hard-earned taxpayer money.
The Illinois Department of Human Services said it has not yet received any formal notice that federal funding has been affected. The agency stated that it would inform the public in a timely manner should there be any changes to programs or funding.
This decision follows HHS’s move last week to freeze federal child care funding for Minnesota, after the department cited blatant fraud in the state’s public assistance programs.
Since 2021, Minnesota has uncovered multiple fraud cases involving public programs, with more than 90 individuals facing federal charges. Prosecutors estimate the total fraud amount could reach $9 billion.
The investigations began with a case during the COVID-19 pandemic involving approximately $250 million, centered on a nonprofit organization called Feeding Our Future, which was accused of illegally misappropriating federal child nutrition program funds.
Federal prosecutors later uncovered large-scale fraud in housing programs for seniors and people with disabilities, as well as in programs providing services to children with autism.
Daycare centers a focus
The Trump administration is also investigating alleged fraud at multiple daycare centers in Minnesota. The issue drew national attention after conservative YouTube blogger Nick Shirley released videos showing visits to several federally funded childcare facilities in the Minneapolis area where no children were present.
CBS News later visited several of the childcare centers mentioned by Shirley and, based on state records, found that all but two held valid licenses. All facilities still operating had been inspected by state regulators within the past six months.
Minnesota Governor Tim Walz announced Monday that he would not seek re-election, saying he would focus on responding to the fraud allegations facing the state.
President Trump has previously criticized Minnesota’s handling of the scandal and has made tough remarks on immigration issues. He has also targeted California, led by Democratic Governor Gavin Newsom. On Tuesday, Trump posted on his Truth Social platform that fraud investigations into California “have begun.”
In recent years, the Trump administration has taken a hardline stance on fiscal oversight. During last year’s historic government shutdown, it suspended infrastructure, climate, and disaster preparedness funding to certain Democratic-led states and cities. The administration said these actions were intended to strengthen oversight of federal spending and ensure compliance.
Democrats argue that the funds were approved by Congress and have objected to the administration’s actions.
