Trump Administration Suspends Aid to States Over Fraud Concerns

Thu Jan 08 2026 16:00:00 GMT+0200 (Eastern European Standard Time)

In a controversial move, President Trump's administration halts funding for family support programs in five Democratic-led states, citing alleged fraud. The impacted states respond with plans to challenge the decision.

The Trump administration has announced a suspension of funding for various programs aimed at assisting needy families in five Democratic-led states: California, Colorado, Illinois, Minnesota, and New York. The Department of Health and Human Services claims this action is due to substantial fraud allegations related to the distribution of welfare funds. The affected states are preparing legal action to contest the funding withdrawal, asserting it unfairly targets vulnerable families. Critics, including Democratic politicians, argue that the motive is politically driven rather than focused on addressing actual fraud. This unfolding situation raises significant concerns about the impact on low-income families relying on these essential support programs.

President Donald Trump’s administration announced on Tuesday that it will suspend funding for programs designed to support families with children in five Democratic-led states amid allegations of fraud.

U.S. Department of Health and Human Services spokesperson Andrew Nixon stated, For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch. However, specifics regarding the alleged fraud or the broader plan for withholding funds have yet to be disclosed.

A source from the White House budget office, who requested anonymity, indicated that the decision is primarily due to claims of states disproportionately disbursing money to individuals living in the U.S. illegally. The five targeted states include California, Colorado, Illinois, Minnesota, and New York. As of Tuesday afternoon, no state had received formal notice regarding the funding pause, though New York Governor Kathy Hochul expressed readiness to challenge the administration in court.

“We’ll fight this with every fiber of our being, because our kids should not be political pawns in a fight that Donald Trump seems to have with blue state governors,” Hochul said.

Essential Lifelines for Families

The programs affected serve as critical support for disadvantaged families:

— The Child Care Development Block Grant provides subsidized daycare for low-income households, allowing parents to work or pursue education.

— Temporary Assistance for Needy Families offers cash assistance and job training to help poverty-stricken parents afford essentials like diapers and clothing, aiming to reduce their reliance on public assistance.

— The Social Services Block Grant funds various social service programs.

The impact of potentially losing these resources is concerning to state officials. Colorado Governor Jared Polis's office stated, These resources support families in need and help them access food and much more. To target the most susceptible families in America this way would be horrific.\”

Trump mentioned on social media Tuesday, The Fraud Investigation of California has begun, although he did not provide additional details regarding specific fraud cases. In response, Tara Gallegos, a representative for California Governor Gavin Newsom, criticized Trump, calling him a deranged, habitual liar and defended California's efforts to combat fraud.

Senator Kirsten Gillibrand of New York condemned the administration’s actions, arguing they are politically motivated rather than genuine efforts to address fraud. She emphasized the government’s responsibility to assist the most vulnerable citizens, stating, Using power to harm the neediest Americans is both immoral and indefensible.

An Ongoing Narrative of Fraud Allegations

The Trump administration has consistently raised concerns surrounding potential fraud in federally funded programs, leveraging these claims as justification for withholding funds. In Minnesota, childcare funding has been frozen since late last month due to investigations into alleged fraud schemes in daycare facilities managed by individuals of Somali origin.

Officials from the HHS indicated that no state would receive childcare funds unless they provide more in-depth verification. Many states claim they have not been made aware of further requirements pertaining to this funding freeze.

Additionally, the administration has publicized fraud allegations concerning the Supplemental Nutrition Assistance Program (SNAP), threatening to withhold administrative funds from states—mostly those led by Democrats—unless they comply with requests for detailed recipient information. This would require substantial time and resources from states to formulate.

Although the administration contends that data from Republican-led states indicates worse fraud levels than previously thought, specifics have yet to be revealed.

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This article was contributed to by several Associated Press journalists including Anthony Izaguirre, Steve Karnowski, Trân Nguyễn, Todd Richmond, Colleen Slevin, Darlene Superville, and Sophie Tareen.