The Department of Health and Human Services will be freezing funding for childcare services in five blue states, the Trump administration announced on Monday.
#BREAKING: Trump admin freezes childcare funding in New York, California, and other states.
— Insider Wire (@InsiderWire) January 5, 2026
The New York Post reported that over $10 billion in childcare funding would be paused for California, Colorado, Illinois, Minnesota, and New York after funds were being funneled to illegal immigrants. Further, all 50 states will be required to provide increased data before releasing funds for childcare.
HHS further announced that it would close a Biden-era loophole that allowed for payouts without verifying attendance. Under the new guidelines, states can require payouts to be granted by attendance rather than enrollment and upfront payouts are no longer needed.
“Paying providers upfront based on paper enrollment instead of actual attendance invites abuse,” Deputy Secretary Jim O’Neill said in a statement. “In Minnesota, we’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate.”
“What we found in Minnesota we’re going to find in a lot of other states.”
— The Will Cain Show (@WillCainShow) January 5, 2026
🚨NEW: Assistant Secretary for the Administration for Children and Families at HHS Alex Adams highlights the slashing of a Biden-era rule that gave childcare centers billions in funding without verifying… pic.twitter.com/KLPOvhq9MX
The decisions to reform come after investigations uncovered widespread fraud across numerous Somali-run daycares in Minnesota.
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