A federal judge ruled Friday that President Donald Trump's administration cannot block federal money for child care subsidies and other programs aimed at supporting needy children and their families from flowing to five Democratic-led states for now.
The states of California, Colorado, Illinois, Minnesota and New York argued that a policy announced Tuesday to freeze funds for three grant programs is having an immediate impact on them and creating “operational chaos.” In court filings and a hearing earlier Friday, the states contended that the government did not have a legal reason for holding back the money from those states.
The U.S. Department of Health and Human Services said it was pausing the funding because it had “reason to believe” the states were granting benefits to people in the country illegally, though it did not provide evidence or explain why it was targeting those states and not others.
The programs are the Child Care and Development Fund, which subsidizes child care for children from low-income families; the Temporary Assistance for Needy Families program, which provides cash assistance and job training; and the Social Services Block Grant, a smaller fund that provides money for a variety of programs.
The five states say they receive a total of more than $10 billion a year from the programs.
The ruling from U.S. District Judge Arun Subramanian, who was nominated to the bench by former President Joe Biden, is in place until further arguments are made in court.
The government had requested reams of data from the five states, including the names and Social Security numbers of everyone who received benefits from some of the programs since 2022.
The states argue that the effort is unconstitutional and is intended to go after Trump’s political adversaries rather than to stamp out fraud in government programs — something the states say they already do.
Jessica Ranucci, a lawyer in the New York Attorney General’s office, said in the Friday hearing, which was conducted by telephone, that at least four of the states had already had money delayed after requesting it. She said that if the states can’t get child care funds, there will be immediate uncertainty for providers and families who rely on the programs.
A lawyer for the federal government, Kamika Shaw, said it was her understanding that the money had not stopped flowing to states.
Attorneys general in five Democratic-led states filed a lawsuit Thursday against President Donald Trump's administration after it said it would freeze money for several public benefit programs, citing concerns about fraud in the programs designed to help low-income families.
The states — California, Colorado, Minnesota, Illinois and New York — called the move an unconstitutional abuse of power. The Trump administration announced earlier this week it was withholding their social safety net funding. The funding went toward three federal programs, two of which focus on lifting families with children out of poverty.
New York Attorney General Letitia James, who is leading the lawsuit, said the Trump administration is overstepping its authority by freezing billions of dollars in funds that were already approved for the states by Congress.
The lawsuit filed in the U.S. District Court for the Southern District of New York asks the courts to order the administration to halt the freeze and release the funds.
“Once again, the most vulnerable families in our communities are bearing the brunt of this administration’s campaign of chaos and retribution,” James said.
The U.S. Department of Health and Human Services this week told the five states it was freezing their money for the Child Care and Development Fund, which subsidizes child care for children from low-income families; the Temporary Assistance for Needy Families program, which provides cash assistance and job training; and the Social Services Block Grant.
HHS officials did not immediately respond to a request for comment on the lawsuit.
About half of the $10 billion in funding targeted by the Trump administration supported California programs, said the state's attorney general, Rob Bonta.
In letters to the states, Alex J. Adams, assistant secretary for the Administration for Children and Families, wrote that HHS had “reason to believe” the states were providing benefits to people who were in the U.S. illegally, offering no further details about the allegations. They requested reams of data, including the names and Social Security numbers of everyone that had received some of the benefits.
“The letters requested that California turn over essentially every document ever associated with the state's implementation of these federal programs and do so within 14 days, by Jan. 20, including personally identifiable information about program participants,” Bonta said. “That is deeply concerning and also deeply frustrating.”
The government intensified its focus on the child care subsidy program after a conservative YouTuber released a video claiming day care centers in Minneapolis had committed up to $100 million in fraud. The child care centers were run by members of the city’s Somali community, which has been frequently maligned by Trump and targeted by immigration authorities.
Minnesota Gov. Tim Walz, a Democrat, has defended his state’s response and said his state is taking aggressive action to prevent further fraud.
