Judge rules Trump administration must keep funding child care subsidies
in 5 states for now
[January 24, 2026]
By GEOFF MULVIHILL
A federal judge ruled Friday that President Donald Trump’s
administration must keep federal funds flowing to child care subsidies
and other social service programs in five Democratic-controlled states —
at least for now.
The ruling Friday from U.S. District Judge Vernon Broderick extends by
two weeks a temporary one issued earlier this month that blocked the
federal government from holding back the money from California,
Colorado, Illinois, Minnesota and New York. The initial temporary
restraining order was to expire Friday.
Broderick said Friday that he would decide later whether the money is to
remain in place while a challenge to cutting it off works its way
through the courts.
The U.S. Department of Health and Human Services sent the five states
notices in early January informing them it would require justifications
for spending the money aimed at helping low-income families. It also
said it would require more documentation, including the names and Social
Security numbers of the beneficiaries of some of the programs.
The programs are intended to help low-income families
The programs impacted by the restrictions at the heart of this case are
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 program, which provides cash assistance
and job training; and the Social Services Block Grant, a smaller fund
that provides money for a variety of programs.
The states say that they receive a total of more more than $10 billion a
year from those programs — and that the programs are essential for
low-income and vulnerable families, including paying about half the cost
of shelters for homeless families in New York City.
For TANF and the Social Service Block Grant, the request required the
states to submit the data, including personal information of recipients
beginning in 2022, with a deadline of Jan. 20.
Government lawyers said Friday that the department was working on more
guidelines about what exactly was required before the initial
restraining order was put in place.
The administration says it took action because of concerns about
fraud
The U.S. Department of Health and Human Services said earlier this month
that it was pausing the funding because it had “reason to believe” the
states were granting benefits to people in the country illegally. At the
time, it didn't explain why.
But in Friday's hearing, Mallika Balachandran, a federal government
lawyer, said that the concerns were raised by media reports, though she
told the judge she did not know which ones. Federal officials have
previously cited a video by a right-wing influencer that claimed fraud
by Minneapolis day care centers operated by people with Somali
backgrounds.
Broderick asked whether the government picked the five states first and
then did research into whether there were fraud claims there.
Balachandran said she didn't know that either.
Broderick said he didn't understand why the government made it harder
for the states to access money for the programs before any wrongdoing
had been found.
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Children watch television at ABC Learning Center in Minneapolis,
Minn., Dec. 31, 2025. (AP Photo/Mark Vancleave, File)
“It just seems like the cart before the horse,” he said.
The states, which all have Democratic governors, say the move was
instead intended to damage Trump’s political adversaries.
Around the same time as the actions aimed at the five states, the
administration put up hurdles to Minnesota for even more federal
dollars. It also began requesting all states to explain how they're
using money in the child care program.
States call the action ‘unlawful many times over’
In court papers last week, the states say what they describe as a
funding freeze does not follow the law.
They say Congress created laws about how the administration can
identify noncompliance or fraud by recipients of the money — and
that the federal government hasn't used that process.
They also say it's improper to freeze funding broadly because of
potential fraud and that producing the data the government called
for is an “impossible demand on an impossible timeline.”
Jessica Ranucci, a lawyer in New York's attorney general's office
arguing on behalf of the five states, told the judge that she was
told only about a half-hour before the hearing that the government
had been developing more information about what states needed to
provide. That wasn't mentioned in the court filings, she said.
The administration says it's not a freeze
In a court filing this week, the administration objected to the
states describing the action as a “funding freeze," even though the
headline on the Department of Health and Human Services announcement
was: “HHS Freezes Child Care and Family Assistance Grants in Five
States for Fraud Concerns.”
Federal government lawyers said the states could get the money going
forward if they provide the requested information and the federal
government finds them to be in compliance with anti-fraud measures.
The administration also notes that it has continued to provide
funding to the states.
The lawyer for the states said that most of the funding, though, was
not accessible until after the restraining order was entered.
This isn't the only case where the federal government has threatened
to cut off funding recently. Trump has said this month that
“sanctuary cities” that resist his administration's immigration
policies — and their states — could lose federal funds.
This week, his budget office told other federal departments and
agencies to c ollect information about money several states receive
— but said it wasn't to withhold money.
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