Trump Admin Freezes $10 Billion in Welfare Funds to Five Blue States Over Fraud Concerns

The Trump administration has taken bold action against what it calls “massive fraud” in Democrat-led states, freezing $10 billion in welfare funding across five states as part of a sweeping federal probe into corruption, waste, and the misuse of taxpayer dollars.

The Department of Health and Human Services announced Monday that it is suspending funding for three major programs — the Child Care Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant — in California, Colorado, Illinois, Minnesota, and New York while investigations are underway.

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

The move follows growing concerns that these programs are being abused — with funds potentially being funneled to non-citizens, shell organizations, or fraudulent service providers, particularly in sanctuary states that have resisted federal oversight.

The largest chunk of frozen funds includes:

• $7.35 billion from TANF

• $2.4 billion from CCDF

• $869 million from Social Services Block Grants

This funding freeze comes just days after HHS halted all childcare payments to Minnesota over allegations that millions of taxpayer dollars had been stolen by fraudulent daycares. Investigators believe some of that money was laundered through fake nonprofits and sent overseas, including to hostile entities.

President Trump confirmed on Tuesday that a new investigation into California had begun, describing it as even “more corrupt than Minnesota.” He accused Governor Gavin Newsom of presiding over a system of widespread fraud and negligence.

New York Democrat Sen. Kirsten Gillibrand lashed out at the move, calling it “immoral” and accusing Trump of targeting children. But the administration maintains the freeze is necessary to protect American families and ensure integrity in the system.

“These programs were created to help struggling American families — not to become ATMs for scam artists and political front groups,” one senior HHS official said.

The administration has made clear this is not a temporary slap on the wrist. Funding will remain frozen until the affected states can prove their systems are secure and their oversight is effective. For now, the message is simple: under President Trump, corruption will be exposed — and federal cash will come with accountability.