Hold onto your wallets, folks—President Trump just dropped a financial bombshell on five Democrat-run states, slashing over $10 billion in vital social services funding.
According to the New York Post, the move, spearheaded by the Department of Health and Human Services (HHS), targets California, Colorado, Illinois, Minnesota, and New York, freezing funds for child care and family assistance programs amid allegations of widespread benefits fraud.
This isn’t pocket change—HHS is withholding $7.35 billion from the Temporary Assistance for Needy Families (TANF) program, $2.4 billion from the Child Care Development Fund (CCDF), and another $869 million from the Social Services Block Grant, all aimed at programs meant to help struggling families.
The funding freeze was formally announced through letters sent on Tuesday by HHS’ Administration for Children and Families (ACF) to the governors of the affected states, citing concerns that taxpayer dollars are being diverted to unauthorized migrants.
Governors like Minnesota’s Tim Walz, California’s Gavin Newsom, Illinois’ JB Pritzker, Colorado’s Jared Polis, and New York’s Kathy Hochul were asked to submit detailed lists of funding recipients dating back to 2019, with some deadlines set for January 20.
While the letters aim to root out fraud, one has to wonder if this is less about accountability and more about sending a message to states that have long opposed Trump’s policies—talk about a fiscal wake-up call.
Concerns over misuse of funds aren’t new—HHS previously flagged issues in December with letters to Gov. Walz and Minneapolis Mayor Jacob Frey, questioning whether billions in federal aid were improperly used to support migration patterns.
Adding fuel to the fire, the HHS Office of Inspector General found years ago that New York City wrongly billed the federal government over $24.7 million for child care subsidies, a glaring red flag for oversight failures.
Then there’s Minnesota, where federal prosecutors have nailed dozens of convictions tied to a staggering $250 million fraud scheme involving Feeding Our Future, a Somali-linked nonprofit accused of funneling money into luxury cars and real estate instead of hungry mouths.
First Assistant Minnesota U.S. Attorney Joe Thompson didn’t mince words, stating, “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
Thompson’s claim that fraudsters may have siphoned off as much as $9 billion is a gut punch to taxpayers who expect their hard-earned dollars to support vulnerable families, not bankroll personal empires.
Independent reporting, including by YouTuber Nick Shirley and later confirmed by the Minnesota Star Tribune, revealed that of 10 child care centers in Minnesota awarded $111 million in public funds, fewer than half even appeared to be operational—where did the money go?
New York Gov. Kathy Hochul fired back, declaring, “This is a fight we’re going to have to take on if we get that notification. It’s vindictive.”
While Hochul’s frustration is palpable, one might argue that if fraud is indeed rampant, freezing funds could be a necessary, if painful, step to protect taxpayer trust—though the timing does raise eyebrows given the political divide.