The Trump administration just pulled the plug on over $10 billion in social services and child care funding for five Democrat-led states, citing serious fraud concerns.
This blockbuster move targets California, Colorado, Illinois, Minnesota, and New York, halting federal dollars for vital programs like the Child Care Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant.
We’re talking big numbers here: $7.35 billion in TANF funds, $2.4 billion from CCDF, and nearly $869 million in Social Services Block Grants are now off the table for these states, at least for now.
On Monday, the Department of Health and Human Services (HHS) sent letters to the affected states, explaining that the funds were being frozen due to alleged fraudulent payouts to non-citizens.
This isn’t the first red flag—six years ago, the HHS Office of Inspector General found New York City had wrongly billed the federal government for over $24.7 million in child care subsidies.
More recently, in December, HHS pressed Minnesota Gov. Tim Walz and Minneapolis Mayor Jacob Frey on whether taxpayer money was improperly aiding unauthorized migration, hinting at systemic problems.
Minnesota’s situation is especially troubling, with Pew Research Center reporting about 130,000 unauthorized migrants in the state as of 2023, up significantly since 2019.
Federal investigations by the Treasury Department and House Oversight Committee are now targeting nonprofits linked to the Somali community in the Twin Cities, home to over 100,000 Somali diaspora members.
The scope of alleged fraud is staggering—prosecutors have secured convictions tied to $250 million stolen by the Somali-linked group Feeding Our Future, with estimates suggesting losses could climb to $9 billion.
First Assistant Minnesota U.S. Attorney Joe Thompson put it bluntly on Dec. 18, 2025, saying, “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
Thompson’s words cut deep, and they beg the question: how can any state justify inaction when fraud reaches such an industrial level?
Minnesota Gov. Tim Walz pushed back at a Monday press conference, stating, “We’ll win the fight against the fraudsters, but the political gamesmanship we’re seeing from Republicans is only making that fight harder.” While Walz’s irritation with partisan tactics is relatable, sidestepping the scale of the fraud as mere politics feels like a dodge.
Former President Trump didn’t hold back on Truth Social Monday, slamming Walz and other Democratic governors like Gavin Newsom, JB Pritzker, and Kathy Hochul for what he calls corruption, declaring, “No one is above the law!”
Trump’s sharp critique, while brash, taps into a real frustration among taxpayers tired of seeing their hard-earned money vanish into questionable programs. Shouldn’t accountability be a bipartisan goal?
Colorado and California officials, though not yet formally notified of cuts, voiced concern over the impact on needy families, a valid point that reminds us fraud fixes mustn’t punish the vulnerable. Balancing oversight with compassion is the challenge ahead, and both sides need to step up without finger-pointing.
