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The Trump administration has frozen $10 billion in federal child care funds to five Democratic-led states, citing concerns over widespread fraud and misuse of public assistance programs, Axios reported.
Letters sent Tuesday by the Administration for Children and Families, a division of the Department of Health and Human Services, informed Minnesota, New York, California, Illinois and Colorado that funding under three major social welfare programs will be suspended pending a “thorough review.”
The freeze affects the Temporary Assistance for Needy Families (TANF) program, the Child Care Development Fund (CCDF) and Social Services Block Grants (SSBG). The agency is requiring the states to provide detailed data on all recipients of federal child care and social service funds, including names, Social Security numbers, birth dates and other identifying information dating back several years.
“These concerns have been heightened by recent federal prosecutions and additional allegations that substantial portions of federal resources were fraudulently diverted away from the American families they were intended to assist,” the letter to Illinois said, according to Axios.
“Additionally, ACF has reason to believe that the State of Illinois is illicitly providing illegal aliens with CCDF benefits intended for American citizens and lawful permanent residents,” the letter continued.
The review follows months of public controversy in Minnesota, where whistleblowers and independent journalists have reported widespread misuse of federal aid. A viral video by independent journalist Nick Shirley showed Minneapolis-area day care facilities allegedly receiving hundreds of millions of dollars in taxpayer funds despite limited or non-existent operations.
The temporary suspension is expected to delay payments to child care providers across the affected states, with some programs facing possible closures if the freeze continues.
Funding will remain suspended until each state completes the federal compliance review, with some programs required to submit full documentation by Jan. 20.