Trump Freezes $10B In Child Care, Social Services To CA And Other Democratic States

The Trump Administration is freezing some $10 billion in federal funding for child-care and other social services in California and four other Democrat-led states over allegations of fraudulent programming.

The five states are California, Illinois, New York, Minnesota and Colorado, The Department of Health and Human Services has confirmed with multiple news outlets.

The scale-back in funds could hamper child-care services for low income families in the five states as the New Year begins.

“For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch,” according to a statement from HHS. “Under the Trump Administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure these states are following the law and protecting hard-earned taxpayer money.”

The agency will slash more than $7 billion in funding for the Temporary Assistance for Needy Families program.

On Monday, HHS through the Administration for Children and Families said it would rollback a series of Biden-era child care rules that "weakened oversight and increased the risk of waste, fraud and abuse in federally funded state-child care."

The federal health agencies say previous rules required states to pay providers before verifying any attendance and before care was delivered.

“Congress appropriated this funding to support working families and ensure children have safe places to grow and learn,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “Loopholes and fraud diverted that money to bad actors instead. Today, we are correcting that failure and returning these funds to the working families they were meant to serve.”

Though child-care centers are being investigated in Minnesota, HHS has not cited any evidence or examples of fraud in the five states impacted by the funding freeze.

A senior Trump administration official told ABC News that funding has been frozen due to "rampant fraud" and "giving money to illegals."

The sudden freeze comes a month after 23-year-old conservative content creator Nick Shirley claimed in a YouTube video that Minnesota child care centers run by Somalis were fraudulently taking federal money. The video prompted HHS to freeze Minnesota child care payments on Dec. 30.

HHS Deputy Secretary Jim O'Neill praised Shirley's video in his own post on X.

"We have turned off the money spigot and we are finding the fraud," he said on Dec. 30.

Since his video went viral, Shirley told talk show host Riley Gaines that he's now receiving tips of alleged day care fraud from all over the country.

"The people have given me a mandate to expose more of the fraud, so I'll be exposing more," Shirley told Gaines.

On Tuesday, President Donald Trump announced on social media that the "Fraud Investigation of California has begun."

The president has not provided any information about what is being investigated.

In his social media post, Trump said that California under Gov. Gavin Newsom is "more corrupt than Minnesota."

Newsom, viewed widely as the 2028 presidential frontrunner for the Democrats, has frequently clashed with the president, calling him a "deranged, habitual liar whose relationship with reality ended years ago."

Trump's announcement comes after California's Republican gubernatorial and comptroller candidates said they found $250 billion in potential welfare fraud through a tip-line, the New York Post reported Monday.

Candidates Steve Hilton and state controller candidate Herb Morgan allege that there is systematic theft from state agencies, which they found through a "Califraudia" tipline, paid for by Hilton. The pair are calling for a formal investigation as the allegations of fraud remain unconfirmed, the Denver Gazette reported.

Newsom's press office responded in a statement, according to media reports: "We don't respond to MAGA made-up numbers."