The Trump administration has frozen crucial social safety net funds for five Democratic-led states, citing concerns about potential fraud involving undocumented immigrants. A federal judge temporarily halted the freeze on Friday, granting a two-week reprieve while legal arguments proceed.

The Department of Health and Human Services announced Tuesday it had suspended payments to California, Colorado, Illinois, Minnesota, and New York from three key programs: the Child Care and Development Fund, which subsidizes child care for 1.3 million 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.

According to the affected states, these programs represent over $10 billion in annual funding. New York officials warned that the suspension threatens services including homeless shelters, adoption services, child welfare investigations, and other critical social programs, potentially creating budget shortfalls in the hundreds of millions of dollars this month alone.

Letters to state officials claimed the administration “has reason to believe” each state “is illicitly providing illegal aliens” with benefits. However, the notices did not provide specific evidence or explain why these five states were singled out while others remained unaffected.

U.S. District Judge Arun Subramanian, a Biden appointee, did not rule on the legality of the funding freeze but determined the states had met the legal threshold “to protect the status quo” temporarily while the case proceeds.

The administration has demanded extensive documentation from the targeted states, including names, Social Security numbers, and other identifying details for program beneficiaries since at least 2022, plus information about subcontractors and program providers dating back to 2019. For child care programs, attendance records were requested, though without personal information about children or families.

This push aligns with broader Trump administration efforts to collect and utilize similar beneficiary information across government assistance programs. Ruth Friedman, a senior fellow at The Century Foundation who previously managed child care programs in the Biden administration, noted that assembling such data could prove challenging since it isn’t currently required by federal regulations.

Beyond the five states facing the funding freeze, the administration has imposed new verification requirements on the remaining 45 states to access their allocated child care funds. States must now verify enrollment and attendance at child care centers and submit “a strong justification for the use of funds” before receiving distributions through an online system.

The administration framed these changes as “implementing strategies and program controls to identify fraud and ensure program integrity,” part of a broader “defend the spend” approach implemented by Trump’s Department of Government Efficiency. This policy was briefly applied to day care funding last year before being reversed.

Experts warn that even temporary delays could have lasting consequences. Elliot Haspel, a senior fellow at the family-focused think tank Capita, cautioned that funding interruptions could trigger layoffs or closures at child care centers, affecting both subsidized families and those paying full price. “You can create chaos very quickly,” Haspel noted, “and the harm may roll on the longer it happens.”

Minnesota has faced particularly intense scrutiny following claims from a pro-Trump influencer last month alleging up to $100 million in fraud at Somali-operated day care centers in Minneapolis. This came against the backdrop of previous fraud allegations involving Somali defendants, including a case where 78 people were charged and 57 convicted after prosecutors said the nonprofit group Feeding Our Future misappropriated $250 million from a pandemic child nutrition program.

Minnesota officials have informed child care providers that their federal funding is suspended, with the administration demanding records on providers, state oversight efforts, and program finances by Friday. In Tuesday’s letter to Minnesota, the administration claimed, “Your office has not demonstrated that the state has effective mechanisms in place to prevent fraud.”

Governor Tim Walz has defended his state’s response, emphasizing that Minnesota is taking aggressive action to prevent further fraud. On Friday, Agriculture Secretary Brooke Rollins announced an additional freeze of approximately $130 million in annual USDA funding to Minnesota, again citing fraud concerns.

The dispute highlights growing tensions between the federal government and Democratic-led states as social safety net programs become increasingly politicized ahead of the November elections.