The administration of former U.S. President Donald Trump moved on Monday to withhold billions of dollars in federal social services funding from several states led by Democrats. This action forms part of a broader response to emerging, yet unverified, allegations of fraud centred in Minnesota.
Billions in Grants Frozen
An official from the U.S. Department of Health and Human Services confirmed to HuffPost that the agency will freeze approximately $10 billion in federal grants destined for California, Colorado, Illinois, Minnesota, and New York. The New York Post first reported this development. The administration did not immediately offer a public rationale for the decision, leaving it unclear if specific fraud evidence or political motivations were the driving force.
The funding freeze targets three critical assistance programs: the Child Care and Development Fund, the Social Services Block Grant, and the Temporary Assistance for Needy Families (TANF) program. TANF is a federal antipoverty initiative, commonly referred to as welfare, that provides cash benefits and other support to nearly one million families across the United States.
Minnesota at the Centre of the Storm
The move follows significant fraud allegations in Minnesota. The U.S. Justice Department has already charged dozens of individuals in connection with a massive scheme that allegedly diverted $250 million from federal child nutrition funds. The state government has admitted to failures in its oversight of that program.
In a separate incident from December, a right-wing YouTuber posted a video accusing several daycare centres of fraud, claiming they were not serving children. State inspectors said they reviewed those providers and found no violations, but the Trump administration subsequently froze childcare payments nationwide.
The political fallout was immediate. Minnesota's Democratic Governor, Tim Walz, announced on Monday he was ending his campaign for a third term. Walz stated he could not simultaneously run for office, combat real fraud, and fight against what he called fraudulent accusations. "Donald Trump and his allies — in Washington, in St. Paul, and online — want to make our state a colder, meaner place," Walz said in his announcement.
Experts Question the TANF Freeze
Policy experts have raised questions about the decision to freeze TANF funds. Josh McCabe, director of social policy at the centrist Niskanen Center, noted that the reported freeze of $7.35 billion in TANF money for the five states represents their entire annual grant allotment.
McCabe criticized the move on social media platform X, arguing it "will achieve nothing and undermine actual efforts to reduce improper payments and protect program integrity." The TANF program was not implicated in either the Minnesota child nutrition fraud case or the YouTube allegations, making the targeted freeze on these particular states a point of contention.
The White House action appears designed to amplify a narrative of fraud that has proven damaging to Democrats, particularly to figures like former vice-presidential candidate Tim Walz. The long-term impact on the social safety net in the affected states remains to be seen as the administration withholds vital antipoverty resources.
