Friday, January 9, 2026- Attorneys general from five Democratic‑led states have launched a major federal lawsuit against the Trump administration after the Department of Health and Human Services abruptly froze more than $10 billion in federal funding that supports child care, family assistance, and essential social services.
The legal action, filed Thursday in the U.S. District Court for the Southern District of New York, names the administration’s move as unlawful and a dangerous blow to working families who depend on these resources.
The funds at stake are not small change they include billions from the Temporary Assistance for Needy Families (TANF) program, the Child Care and Development Fund (CCDF), and Social Services Block Grants that help parents afford care, stay employed, access food and housing support, and keep vulnerable children safe.
State officials argue that freezing money already approved by Congress without clear evidence of widespread fraud is an overreach of executive power that threatens to shutter day‑care programs and leave families without critical support.
Administration officials say the hold is about preventing misuse and improper benefit distribution, particularly amid fraud allegations linked to one state’s childcare program. But governors and attorneys general from California, Colorado, Illinois, Minnesota, and New York say the freeze is politically motivated and unfairly punishes states and families for broader enforcement actions and they’re asking the courts to force the funds released immediately to avert a social safety net crisis.
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