Trump Administration Suspends Over $10 Billion In Aid In 5 Blue States Amid Fraud Concerns: Report

The Trump administration has reportedly decided to freeze over $10 billion in funding for social services and child care in five Democratic-led states, citing concerns about fraudulent allocation to non-citizens.

Fraud Concerns Threaten Funding

The Department of Health and Human Services (HHS) has placed a freeze on taxpayer funding from the Child Care Development Fund (CCDF), the Temporary Assistance for Needy Families (TANF) program, and the Social Services Block Grant program, the New York Post reported on Monday.

At least $10.6 billion in federal social support funding is being withheld from California, Colorado, Illinois, Minnesota, and New York, affecting three major programs: $7.35 billion from TANF, nearly $2.4 billion from CCDF, and $869 million from the Social Services Block Grant.

The states were notified of the funding freeze through letters sent on Monday, which cited concerns that benefits may have been fraudulently distributed to non-U.S. citizens. The decision references a 2019 report from the HHS Office of Inspector General, which concluded that New York City had improperly charged the federal government more than $24.7 million for child care subsidies.

President Donald Trump also shared this report on his Truth Social account on Monday.

The HHS department did not immediately respond to Benzinga‘s request for comment.

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Trump Admin's Repeated Funding Freezes

This is not the first time the Trump administration has taken such measures. Late in December, the Small Business Administration paused all grant funding to Minnesota amid a $430 million Paycheck Protection Program fraud probe. SBA Administrator Kelly Loeffler attributed the scale of the fraud to oversight failures under Minnesota Gov. Tim Walz.

Before that, the administration announced a halt in Supplemental Nutrition Assistance Program (SNAP) benefits to Democrat-run states that did not disclose identifying information about the beneficiaries’ immigration status. This decision affected states like California, New York, and Minnesota.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.