The Trump administration has announced plans to freeze about $10 billion in federal aid for families in California and four other Democrat-led states, citing concerns over fraud. The move comes after a similar freeze in Minnesota, where federal officials claimed some daycare centers misused funds. This was first reported by the LAist.President Trump wrote on Truth Social that an investigation into corruption in California has begun, though he did not provide details about the alleged fraud.“California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible??? The Fraud Investigation of California has begun,” Trump said, according to LAist.Federal officials told New York Post and New York Times reporters that the freeze is linked to concerns that benefits may have been fraudulently sent to non-citizens. Andrew Nixon, a spokesperson for the U.S. Department of Health and Human Services, said the administration wants to ensure taxpayer dollars are being used properly.
California responds
Governor Gavin Newsom’s office rejected the claims. They highlighted that since taking office, the state has blocked $125 billion in fraud and prosecuted those who exploited public programs, according to LAist.LAist’s reporting suggests that criminal cases involving federal childcare funds in California are very rare. In the past decade, only one significant case was reported publicly: in 2023, four men stole $3.7 million in federal childcare benefits through a San Diego-based organization. The total amount affected represents a very small fraction of the federal funds California receives for childcare.
How families could be affected
The freeze could impact California, Minnesota, New York, Illinois, and Colorado. Officials told New York Post and New York Times that it would affect nearly $7 billion in cash assistance, $2.4 billion in childcare programs for working parents, and $870 million in social services grants.In California, the Temporary Assistance for Needy Families (TANF) program receives $3.7 billion annually. About 270,000 people in Los Angeles County benefit, including roughly 200,000 children. Families receive around $1,000 per month in cash assistance.Experts warn that cutting or pausing these funds would have serious consequences. Stacy Lee from advocacy group Children Now told LAist, “It would affect families, children, and childcare providers across the state. The impact would be severe.”Nick Ippolito, chief of staff at the Los Angeles County Department of Public Social Services, said the department has a 170-person team focused on fraud prevention. He emphasized that all allegations are taken seriously.Childcare unions also raised concerns. Max Arias, chairperson of Child Care Providers United, which represents more than 70,000 California childcare workers, said to LAist, “Freezing funding could force families to lose access to care and put working parents in a difficult position between keeping their children safe and paying their bills.”
Next steps and legal challenges
Federal officials reportedly planned to send letters to the affected states about the funding pause, according to New York Post. California officials said they had not received any formal notification as of Tuesday afternoon.Jason Montiel, spokesperson for the California Department of Social Services, told LAist, “These funds are essential for working families. We take fraud seriously, but we have received no official notice from the federal government about a freeze or suspension of child care funding.”Legal action is expected. States and local governments have previously challenged federal funding freezes in court, including a case where over $600 million in federal grants for Los Angeles city programs was protected, according to LAist.
About the Author
