Judge rules Trump administration must keep funding child care subsidies in 5 states for now

Federal Judge Extends Block on Social Service Funding Cuts in Five Democratic States

A federal judge has extended a temporary order preventing the Trump administration from withholding federal funds for child care subsidies and other social service programs in five Democratic-led states. The ruling, issued Friday by U.S. District Judge Vernon Broderick, maintains the flow of critical funding to California, Colorado, Illinois, Minnesota, and New York for at least two more weeks.

The decision extends an earlier temporary restraining order that was set to expire Friday. Judge Broderick indicated he would decide later whether to keep the funds flowing while the legal challenge proceeds through the courts.

The dispute began in early January when the U.S. Department of Health and Human Services (HHS) notified the five states that they would need to provide additional documentation to continue receiving funds. This included justifications for program spending and personal information such as names and Social Security numbers of benefit recipients, with a deadline of January 20 for some programs.

At stake are billions in federal funding that support vulnerable populations across these states. The affected programs include the Child Care and Development Fund, which subsidizes child care for 1.3 million children from low-income families nationwide; the Temporary Assistance for Needy Families (TANF) program, which provides cash assistance and job training; and the Social Services Block Grant, which funds various social welfare initiatives.

The five states collectively receive more than $10 billion annually from these programs. They argue these funds are essential for low-income families, with New York City specifically noting that the money covers approximately half the cost of shelters for homeless families.

HHS initially claimed it was pausing funding because it had “reason to believe” the states were granting benefits to undocumented immigrants, though initially provided no evidence. During Friday’s hearing, federal government lawyer Mallika Balachandran revealed that the concerns stemmed from media reports, but could not specify which ones. Previous government statements have referenced a video by a right-wing influencer alleging fraud at Minneapolis day care centers operated by people with Somali backgrounds.

Judge Broderick questioned the government’s approach, asking whether officials had selected the five states first and then researched potential fraud claims. When Balachandran couldn’t answer, the judge expressed confusion about why the government would restrict access to funding before establishing any wrongdoing. “It just seems like the cart before the horse,” he said.

The states, all with Democratic governors, contend the action was politically motivated. They note that around the same time, the administration created additional obstacles for Minnesota to access other federal dollars and began requesting all states to explain their use of child care program funds.

In court filings, the states argue the funding restrictions violate federal law, which establishes specific procedures for identifying noncompliance or fraud by funding recipients. They maintain the government has bypassed these legally mandated processes and is making “impossible demands” with unrealistic timelines.

Jessica Ranucci, representing the five states from New York’s attorney general’s office, told the judge she had only learned shortly before the hearing that the government was developing additional guidance about what states needed to provide—information not included in court filings.

The administration disputes characterizing its action as a “funding freeze,” despite using that exact terminology in its own announcement titled: “HHS Freezes Child Care and Family Assistance Grants in Five States for Fraud Concerns.” Government lawyers maintain that states could continue receiving funds by providing the requested information and demonstrating compliance with anti-fraud measures.

This case emerges amid broader tensions over federal funding. President Trump recently suggested “sanctuary cities” that resist his immigration policies could lose federal funding. Additionally, his budget office instructed federal departments to collect information about money flowing to certain states, though officials insisted this wasn’t intended to withhold funds.

The outcome of this legal battle could set important precedents for federal-state relations and the executive branch’s authority to impose new conditions on congressionally authorized funding, particularly when those conditions appear to target states with opposing political leadership.