US Health Dept to freeze $12.8 billion in funding to 5 democratic states

WASHINGTON – The Trump administration plans to freeze US$10 billion (S$12.8 billion) in funding for child care subsidies, social services and cash support for low-income families in five states controlled by Democrats, claiming widespread fraud throughout those states, without citing evidence, after a major welfare fraud scheme
in one of them.

Minnesota, New York, California, Illinois and Colorado will be cut off from around US$7 billion in funding for the Temporary Assistance for Needy Families programme, which provides cash assistance to households with children, according to two people familiar with the matter.

The five states will also lose access to nearly US$2.4 billion for the Child Care Development Fund, which supports child care for working parents, and around US$870 million for social services grants that mostly benefit children at risk, the people said.

The funding pause could jeopardise programmes that serve hundreds of thousands of low-income households in the five states.

The planned freeze appears to build on the administration’s pause last week in US$185 million in annual aid to Minnesota day care centres after investigators said that more than a dozen welfare fraud schemes in that state had led to billions of dollars in taxpayer losses.

No evidence has suggested that the other four Democratic states suffered similar widespread welfare frauds, but Mr Andrew Nixon, a spokesperson for the Department of Health and Human Services, which is in charge of disbursing the funding, suggested that the fraud cases in Minnesota led to the freeze.

“Democrat-led states and governors have been complicit in allowing massive amounts of fraud to occur under their watch,” Mr Nixon said in a statement. “Under the Trump administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes.”

The planned freeze, reported earlier by The New York Post, is the latest in the Trump administration’s pattern of interrupting federal dollars to Democratic-run cities and states, leveraging disbursement of congressionally approved funding to punish perceived enemies and political opponents.

During the government shutdown in 2025, the administration froze or cancelled more than 200 projects that primarily were located in Democratic cities, congressional districts and states.

The administration also cut federal disaster preparedness funds for the District of Columbia and 11 blue states after they opposed US President Donald Trump’s mass deportation campaign, though a federal judge later ordered the funding restored.

Senator Kirsten Gillibrand from New York said the funding freeze had “nothing to do with fraud” and characterised the cuts as “political retribution that punishes poor children in need of assistance”.

“I demand that President Trump unfreeze this funding and stop this brazen attack on our children,” Ms Gillibrand said.

As of the night of Jan 5, officials in New York and California said they had not received any official notification of the funding freeze. Spokespeople for Colorado, Illinois and Minnesota did not immediately respond to requests for comment.

Mr Trump had foreshadowed a freezing of funds for some of the states, vowing on Jan 4 to cut welfare money for Minnesota, California and Illinois. He cited the fraud scandal in Minnesota, in which dozens of people, largely members of the Somali diaspora, have been charged with stealing hundreds of millions of dollars from a government programme meant to keep children fed during the Covid-19 pandemic.

The scandal has been a frequent subject for Mr Trump, who has long seized on immigration as a potent political weapon. He has called Somali immigrants “garbage” and said he does not want them in the country
.

“The Somalians are ripping off our country,” he said on Jan 4. “What they are doing is they’re stealing money from the American taxpayer – and every one of them should be forced to leave this country.”

Mr Trump has also targeted Minnesota’s Democratic Governor Tim Walz, who on Jan 5 dropped his bid for re-election for a third term, citing the welfare scandal. NYTIMES