A federal judge ruled Friday that the Trump administration cannot for now block federal money for child care subsidies and other programs aimed at helping low-income families with children flock to five Democratic-led states.
The states of California, Colorado, Illinois, Minnesota and New York argued that a policy announced Tuesday to freeze billions of dollars in funds for three grant programs was immediately impacting them and creating “operational chaos.” In court filings and at a hearing earlier Friday, the states argued the government had no legal reason to deny them the money.
The U.S. Department of Health and Human Services said it was withholding funding because it had “reason to believe” that states were illegally providing benefits to people living in the country, although it did not provide evidence or explain why it targeted those states and not others.
U.S. District Judge Arun Subramanian, who was appointed to the bench by Joe Biden, did not rule on the legality of the funding freeze, but said the five states had met a legal threshold “to protect the status quo” for at least 14 days while arguments were presented in court.
Health Department officials did not immediately respond to a request for comment.
The affected programs are 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 Human Services Block Grant, a smaller fund that provides money for a variety of programs.
The five states report receiving a total of more than $10 billion per year from these programs.
New York Attorney General Letitia James, who is leading the trial, called the ruling “a crucial victory for families whose lives have been upended by this administration’s cruelty.”
The government had requested extensive data from the five states, including the names and Social Security numbers of everyone who has benefited from certain programs since 2022.
The states argue that the effort is unconstitutional and aimed at going after Trump’s political opponents rather than rooting out fraud in government programs — something the states say they already do.
Jessica Ranucci, an attorney in James’ office, said during Friday’s hearing that at least four of the states have already had their money delayed after requesting it. She said if states can’t secure funding for child care, there will be immediate uncertainty for providers and families who rely on these programs.
A lawyer for the federal government, Kamika Shaw, said it was her understanding that the money had not stopped flowing to the states.
The other 45 states face a new requirement to verify child care attendance and submit a “robust justification for the use of funds” that matches the program’s purpose.
Around the same time the judge ended the freeze on child care subsidies, U.S. Agriculture Secretary Brooke Rollins announced the administration would freeze about $130 million a year in funding for her agency in Minnesota.
Rollins said the state’s failure to stop the fraudulent schemes led to the decision. Seventy-eight people have been charged since 2022 — and 57 convicted — after federal prosecutors said Minnesota nonprofit group Feeding Our Future stole $250 million from a program meant to feed children in need during the Covid-19 pandemic.
Minnesota Gov. Tim Walz’s office had no immediate comment Friday evening. State Attorney General Keith Ellison said he would fight the new fund freeze in court.
In a letter to Walz that Rollins shared on social media, she suggested the state could restore its access to funding by justifying how it spent federal money over the past year. All future state transactions involving money from the agency will require the same justification, she said.
Walz and Minnesota became a primary target of the Trump administration during the second term.
Last month, the president called the state’s Somali population “trash” following the Feeding Our Future investigation and other fraud cases involving Somali defendants.
And this week, the administration launched the largest immigration enforcement operation in history in Minneapolis, which led to the shooting death of a woman by an Immigration and Customs Enforcement agent.
