Trump Administration Moves To Freeze About $10 Billion In Childcare Aid To California And Four Other Democratic-Led States

The Trump administration says it plans to pause roughly $10 billion in federal childcare and family assistance to California and four other Democratic-led states, citing concerns about alleged fraud. The announcement follows a separate pause on federal childcare payments to Minnesota, where officials have alleged fraud involving daycare providers.

What Officials Say

Unnamed federal officials told media outlets the administration is concerned some benefits may have been "fraudulently funneled to non-citizens." The funds under review include cash assistance to households with children, subsidies for working parents to obtain childcare, and social services grants that primarily benefit at-risk children.

President Donald J. Trump wrote on Truth Social: "California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that's possible??? The Fraud Investigation of California has begun. Thank you for your attention to this matter!" The president did not specify the alleged fraud he is referring to.

Federal And State Responses

The U.S. Department of Health and Human Services said in an emailed statement that the administration is focused on ensuring federal taxpayer dollars are used for legitimate purposes and that it will hold states accountable. California Gov. Gavin Newsom's press office disputed the president's characterization on social media, saying the governor has blocked substantial fraud and overseen arrests tied to misuse of public funds.

LAist reported it reached out to the White House for details about the president's fraud concerns and sought an interview. California state officials told reporters they had not received formal notice of any federal funding freeze as of mid-afternoon the day after reports first surfaced.

Scale Of The Freeze And Local Impact

Federal plans reportedly target five states — California, Minnesota, New York, Illinois and Colorado — and would withhold about $7 billion in cash assistance for households with children, nearly $2.4 billion for childcare to help working parents, and roughly $870 million in social services grants, according to unnamed officials cited by national outlets. California receives about $3.7 billion a year through Temporary Assistance for Needy Families (TANF), the largest single line-item affected.

Advocates warn a pause in funds would cause severe hardship. Stacy Lee of Children Now said a freeze would be "devastating" for children, families and childcare providers statewide. Los Angeles County's Department of Public Social Services says TANF serves roughly 270,000 people in the county — about 200,000 of them children — and that average cash benefits are about $1,000 per month.

Nick Ippolito, chief of staff at the county DPSS, emphasized the department maintains a 170-person investigations team and takes fraud prevention seriously, but said any pause in payments would harm families who rely on regular cash assistance.

Evidence Of Fraud And Legal Questions

While defrauding federally funded programs is a crime and has led to prosecutions, LAist's review of federal prosecutor press releases in California over more than a decade identified only one criminal case that referenced childcare benefits. That 2023 case alleged $3.7 million was stolen through fraudulent claims tied to a San Diego organization; the defendants pleaded guilty and received prison terms or other sentences.

That $3.7 million figure represents a very small fraction of the total federal childcare spending California has received over the period covered by the review. Legal challenges are possible: states, cities and counties have in the past sued to block funding freezes and new federal conditions, sometimes successfully protecting substantial sums of federal grant money.

Voices From The Field

Childcare workers' unions warn that any freeze — even temporary — would harm low-income families and force working parents to choose between keeping their children in care and paying bills. Max Arias of Child Care Providers United said the threat of frozen funding is a direct attack on working families who depend on affordable childcare.

Jason Montiel, a spokesperson for the California Department of Social Services, said the department administers programs that help working families and that it takes fraud seriously, adding that CDSS had received no formal federal notice of a freeze.

Note: This article was originally published by LAist and has been edited for clarity, structure, and readability.