The U.S. Department of Health and Human Services on Monday rescinded its $10 billion freeze on child care subsidies and social services funding for five Democratic-led states, withdrawing the orders that triggered a legal battle earlier this year.
The funding freeze affected allocations under the Child Care and Development Fund, the Temporary Assistance for Needy Families program and the Social Services Block Grant program, which provide support for child care, family assistance and other social services.
Court filings released Monday show HHS withdrew its Jan. 5 and Jan. 6 letters to California, Colorado, Illinois, Minnesota and New York, including all related data requests and information requirements.
The department also terminated the mechanism it had used to restrict the states’ access to the funds. A federal judge had previously blocked the funding freeze while the lawsuit challenging the action proceeded.
Legal Fight Ends
The dispute began in January after the Trump administration froze more than $10 billion in child care and family assistance funding for California, Colorado, Illinois, Minnesota and New York, citing concerns about fraudulent payments to non-citizens. The action affected funding distributed through the Child Care and Development Fund, Temporary Assistance for Needy Families program and Social Services Block Grant program, prompting the states to sue over the administration’s authority to withhold congressionally approved funds.
The funding suspension affected three major federal programs: the Child Care and Development Fund, the Temporary Assistance for Needy Families program and the Social Services Block Grant program.
Broader Funding Disputes
The child care funding case was one of several legal disputes between Democratic-led states and the Trump administration over federal funding this year. In February, California, Colorado, Illinois and Minnesota separately sued the administration over roughly $600 million in public health funding cuts, arguing the reductions were unlawful and politically motivated.
The Trump administration has also sought to withhold federal funding from states, universities and research institutions over issues including fraud allegations, climate initiatives, diversity programs, transgender policies and pro-Palestinian campus protests.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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