Washington freezes welfare payments to five Democratic states over alleged fraud in child care programs

President Donald Trump’s administration has frozen access to more than $10 billion in federal aid to child care and family assistance programs in five states governed by Democrats, after raising serious concerns about fraud and misuse of public funds, primarily in Minnesota.

The measure, confirmed by the Department of Health and Human Services (HHS), affects Minnesota, New York, Illinois, California and Colorado, and will remain in effect while a comprehensive federal review of the management of these resources is developed.

Programs affected

The freeze impacts three major programs administered by the HHS Administration for Children and Families (ACF):

These funds are intended to support families with children, including assistance for child care costs and other essential social services.

In letters sent to the governors of the five states, ACF notified that access to these earmarks is preemptively restricted, pending submission of detailed justifications and proof of expenditure evidencing compliance with federal requirements.

Origin of the controversy

The decision comes in the midst of the scandal over alleged million-dollar fraud in federally funded child care programs in Minnesota, detected in recent investigations. According to HHS, there are indications that benefits intended exclusively for U.S. citizens and legal residents may have been awarded to individuals who did not meet the requirements established by federal law.

"The families who rely on these programs deserve assurance that the resources are being used lawfully and for their original purpose," said HHS Deputy Secretary Jim O'Neill, who noted that the action reflects the Administration's commitment to program integrity and fiscal responsibility.