The White House has paused billions in federal childcare and family-assistance funds to Minnesota, New York, California, Illinois and Colorado while HHS examines allegations of fraud. The freeze affects about $2.4bn from CCDF, $7.35bn from TANF and $869m from SSBG. Childcare workers and state officials say media reporting found no evidence of childcare fraud and warn the pause could force parents into "impossible choices." A federal court temporarily blocked the freeze on 9 January while litigation continues.
White House Freeze on Childcare Funds Threatens Families in Five States
Parents, teachers, childcare workers and community members hold up handmade signs during a press conference at Nokomis Daycare Center in Minneapolis, Minn. on 31 December 2025.Photograph: Star Tribune/Getty Images(Photograph: Star Tribune/Getty Images)
The White House has moved to pause billions in federal childcare and family-assistance payments to five Democratic-led states, prompting warnings that many families could face "impossible choices" if aid is withdrawn. The pause affects funds flowing to Minnesota, New York, California, Illinois and Colorado while federal officials review allegations of fraud and misuse.
What Funds Are Affected
According to the Department of Health and Human Services (HHS), the action impacts roughly $2.4 billion from the Child Care and Development Fund (CCDF), $7.35 billion from the Temporary Assistance for Needy Families (TANF) program and $869 million from the Social Services Block Grant (SSBG). HHS says the payments will remain on hold until the Administration for Children and Families (ACF) completes a compliance review.
Why the Freeze Was Announced
Federal officials said the pause was prompted by allegations of fraud tied in part to attention around a viral video and to broader concerns about misuse of federal funds. Media investigations have reportedly found no evidence that the childcare centres named in recent online claims misused federal childcare dollars. Reporting has traced some of the controversy back to the 2021 "Feeding Our Future" Covid-era meals-program fraud investigation, a separate probe that did uncover widespread fraud and resulted in prosecutions and convictions.
Voices From Childcare Workers
Childcare providers in the affected states say the freeze would immediately harm families and the local workforce. Alice Dryden, a childcare worker in Chicago, said freezing federal childcare dollars would be "a disaster" for families who rely on them:
"If we had to close our doors or close some classrooms, these families would be faced with impossible choices. It wouldn’t just be a disaster for the families and the children who don’t have daycare to go to any more. This is a support network for the entire community. Our workforce allows the rest of the workforce in the city and the state to function."
Lily Crooks, a childcare worker in Minneapolis, warned that conflating the Feeding Our Future prosecutions with standard childcare funding is misleading and harmful to providers:
"A lot of this reaction about fraud is actually about the Feeding Our Future scandal, which has already been widely covered. Having it brought up more broadly as fraud in childcare centers is extraordinarily misleading. Then to have that narrative picked up by our federal government, which would then freeze childcare funds to an entire state, was extremely stressful and scary."
Other providers described immediate personal and community-level consequences. Francis Ramirez, a longtime worker in Lancaster, California, said she was "in shock," worried about paying bills as a single parent. Pam Frank in Illinois highlighted an existing shortage of providers and said many childcare workers themselves qualify for assistance, increasing vulnerability to any funding disruption.
Federal Response and Legal Fight
HHS pointed to a post by HHS General Counsel Mike Stuart on X, defending the decision as necessary to "defend American taxpayers" and to address "serious concerns" that warranted review. Stuart characterised the states' lawsuit as a "partisan political stunt."
"HHS stands by its decision to take this action to defend American taxpayers. We identified serious concerns in these states that warranted immediate review and action... Waste, fraud, and abuse will not be tolerated in the Trump administration," Stuart wrote.
The attorneys general of the five states counter that the administration has provided no evidence justifying the freeze and argue the action likely violates federal law and the U.S. Constitution. The states sued, and on 9 January a federal court issued a temporary order blocking the freeze while litigation proceeds; the states are pursuing a longer-term injunction as the case continues.
What Comes Next
The timeline for the ACF review remains unclear. Meanwhile, childcare providers, families, and state officials are watching court developments closely, warning that prolonged pauses could disrupt care, force parents out of the workforce and strain local economies.
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