Trump Cuts Billions In Federal Childcare Funds For Democratic-Led States After Minnesota Fraud Scandal

Administration cites welfare fraud allegations as advocates and state leaders warn of political retaliation and sweeping harm to working families.

By Alexis Sterling, Nation of Change

The Trump administration announced this week that it will cut up to $10 billion in federal childcare and social services funding from five Democratic-led states, citing fraud uncovered in Minnesota as justification for a sweeping action that advocates and Democratic lawmakers say will punish families with no connection to the misconduct.

The U.S. Department of Health and Human Services confirmed that New York, California, Colorado, Minnesota, and Illinois will be affected by the funding freeze. The cuts include reductions to major programs that provide cash assistance and childcare support to low income families, even as federal officials have not presented evidence that four of the five states engaged in fraudulent activity.

According to HHS, approximately $7 billion in funding for the Temporary Assistance for Needy Families program will be impacted. TANF provides cash assistance to families with children living in poverty. In addition, the five states will collectively lose nearly $2.4 billion from the Child Care and Development Fund, which helps working parents afford childcare, as well as $870 million in social services grants for children.

The administration has pointed to a fraud scandal in Minnesota as the basis for the broader funding cuts. Dozens of individuals have been convicted of stealing public money through Minnesota’s social services system. In response, the Trump administration previously suspended $185 million in annual aid to childcare centers in the state and announced a pause on childcare funding nationwide until states could provide verification data on how funds were being used.