Federal judge blocks Trump administration's freeze of $10 billion in child care funds

Daniel Miller, Los Angeles Times on Jan 9, 2026

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A federal judge in New York has temporarily blocked the Trump administration’s move to freeze $10 billion in child care funds in five Democrat-led states including California.

The ruling Friday afternoon capped a tumultuous stretch that began earlier this week when the U.S. Department of Health and Human Services told California officials and those in Colorado, Illinois, Minnesota and New York that it would freeze federal funding over fraud concerns.

On Thursday the states sued the administration in federal court in Manhattan. The states sought a temporary restraining order, asking the court to block the funding freeze and the administration’s demands for large volumes of administrative data.

An attorney for the states argued Friday morning that there was an immediate need for funding — and that withholding it would cause chaos by depriving families of their ability to pay for child care, and would harm child care providers who would lose income.

The White House did not immediately respond to a request for comment.

The federal government’s effort has been viewed as a broad attack on social services in California, and jolted tens of thousands of working families and the state’s child care industry. Providers told the Los Angeles Times that the funding freeze could imperil child care centers, many of which operate on slim margins.

In a trio of Jan. 6 letters addressed to Gov. Gavin Newsom, the U.S. Department of Health and Human Services said it was concerned there had been “potential for extensive and systemic fraud” in child care and other social services programs that rely on federal funding, and had “reason to believe” that the state was “illicitly providing illegal aliens” with benefits.

The letters did not provide evidence to support the claims. State officials have said the suggestions of fraud are unsubstantiated.

Newsom has said he welcomes any fraud investigations the federal government might conduct, but said cutting off funding hurts families who rely on the aid. According to the state’s Legislative Analyst’s Office, about $1.4 billion in federal child care funding was frozen per the letters from Health and Human Services.

“You want to support families? You believe in families? Then you believe in supporting child care and child care workers in the workforce,” Newsom told MS NOW.

In instituting the freeze, Health and Human Services had said it would review how the federal money had been used by the state, and was restricting access to additional money amid its inquiries. The federal government asked for various data, including attendance documentation for child care. It also demanded beefed-up fiscal accountability requirements.

“This is just the latest example of Trump’s willingness to throw vulnerable children, vulnerable families and seniors under the bus if he thinks it will advance his vendetta against California and Democratic-led states,” California Attorney General Rob Bonta said at a Thursday evening news conference.