Minnesota families are rattled by threat to cut federal aid for child care

ST. PAUL, Minn. — Minnesota day care providers and parents are warning of severe consequences if federal health officials carry out plans to withhold funds for a program that makes child care affordable for thousands of families.

The Department of Health and Human Services said Tuesday that it was freezing funds for all Minnesota child care centers that it was supporting under the program, citing concerns about fraud.

Day care center owners said that they could go out of business in a matter of weeks. Parents said they feared the move could force them to quit jobs or put off studies so that they could care for their children.

“Many families in Minnesota are living paycheck to paycheck as it is,” said Maria Snider, who runs a day care center in St. Paul. If parents have to quit work to care for children, she said, families could end up homeless.

The consternation came a day after Jim O’Neill, the deputy secretary of the Department of Health and Human Services, announced that the federal government had “frozen all child care payments to the state of Minnesota.”

In a post on social media, O’Neill cited a viral video produced by Nick Shirley, a conservative content creator who claimed to have exposed widespread fraud in day care centers run by people of Somali origin. The video — which does not conclusively prove malfeasance — led to accolades from top officials in the Trump administration.

“We believe the state of Minnesota has allowed scammers and fake day cares to siphon millions of taxpayer dollars over the past decade,” O’Neill said in his own video announcing the funding freeze.

LeAndra Estis, 42, a state employee, said a cutoff in federal funds for child care would be devastating to her family. Her two adult children, who live with her, work at day care centers. Her youngest child, who is 4, attends a subsidized one that still costs several hundred dollars per week.

“I don’t have a family I am able to depend on to watch my kids,” said Estis, who works for the agency that issues driver’s licenses. “Without the funding, I would be forced to quit my job or be terminated.”

At stake is about $185 million that the federal government provides to Minnesota annually to help subsidize child care centers attended by roughly 19,000 children.

Andrew Nixon, a spokesperson for the Department of Health and Human Services, said Wednesday night that federal officials would continue to provide funding for Minnesota’s child care program when they are satisfied that centers are operating with integrity.

Federal health officials are demanding that their state counterparts provide more robust documentation about day care centers, Nixon said.

In particular, federal officials will be requesting detailed attendance logs and documents about regulatory actions or concerns for an unspecified number of centers that the federal government believes could be engaged in fraud, he said. For all other centers, he added, federal officials will demand routine administrative records.

The threat to cut off federal aid for child care is the latest action by the Trump administration in response to a widening scandal over fraud in Minnesota’s social services programs.

Since 2022, federal prosecutors have charged dozens of people with felonies, accusing them of stealing hundred of millions of dollars from programs meant to feed vulnerable children, assist people at risk of homelessness and provide treatment to minors with autism. The vast majority of defendants are of Somali origin.

Local law enforcement officials have investigated day care centers for overbilling in recent years. Those investigations have led to relatively few convictions.

Last month, Shirley visited several day care centers owned by Somalis and demanded to be allowed inside to verify whether children were present.

Most business owners rebuffed him. He said his inability to see children at the centers meant they were defrauding the government, an assertion many Republicans in Washington and Minnesota took at face value.

Officials from the state agency that oversees day care centers said they sent inspectors to the centers featured in Shirley’s video this week, but they have yet to say what they found.

On Wednesday, the Minneapolis Police Department said it was investigating a reported break-in at one of the day care centers featured in the video. Managers at the center told reporters that someone broke in early Tuesday morning and stole enrollment records.

Democrats in Minnesota called the Trump administration’s response to the video reckless.

“The basis for this action is a single YouTube video that was deceptive and bigoted, perfect to appeal to Elon Musk’s algorithm and Donald Trump’s government,” state Sen. Liz Boldon said in a statement.

Gov. Tim Walz, a Democrat who is running for reelection, said that while fraud is a major problem his administration is working hard to address, President Donald Trump’s threat to cut off federal funds for social services in the state was unjustifiable. “He’s politicizing the issue to defund programs that help Minnesotans,” Walz said in a statement.

On New Year’s Eve, parents who rely on subsidized child care in Minnesota said they were scared. Deko Nor, 24, said that losing access to child care for her son, who is 4, would likely mean putting off her dream of starting medical school later this year.

“People are struggling with rent as it is,” she said.

Nor, who is Somali American, said she watched Shirley’s video over the weekend and walked away feeling stunned and fearful.

“I’m sure he doesn’t understand what his words are or how impactful they are,” she said.