Blue States Sue US Over $10 Billion Cuts to Child Care Aid (1)

New York, California, Minnesota and two other Democratic-led states sued the US government to restore $10 billion in aid for programs that serve vulnerable children and families that was slashed amid allegations of nationwide fraud.

The administration announced the funding freeze Tuesday, escalating a conflict that has grown over accusations by President Donald Trump’s administration that Minnesota Governor Tim Walz and other state officials allowed massive fraud in programs supporting child care — a claim the officials deny.

In their lawsuit Thursday in federal court in Manhattan, the states — including Illinois and Colorado — accused the administration of freezing the assistance to punish them “for their political leadership.”

The administration has “provided no explanation for why targeting just these five states — each of which, as they have emphasized, has a Democratic governor — is a reasonable response” to “unsubstantiated assertions of nationwide fraud,” according to the lawsuit.

“As New Yorkers struggle with the rising cost of living, I will not allow this administration to play political games with the resources families need to help make ends meet,” New York Attorney General Letitia James, another frequent target of Trump’s ire, said in a statement.

The White House didn’t immediately respond to a request for comment.

The US Department of Health and Human Services said in a statement Tuesday that it was freezing the funds “following serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs.”

“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” DHS Deputy Secretary Jim O’Neill said in the statement. “This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.”

Earlier: US Restricts State Childcare Payments on Minnesota Fraud Claims

The programs are the Child Care and Development Fund, the Temporary Assistance for Needy Families, known as TANF, and the Social Services Block Grant, according to the complaint.

“The importance of these programs cannot be overstated — they provide cash assistance and fund services to help low-income and vulnerable families,” according to the complaint. “Without these programs, there will be immediate and devastating impacts in plaintiff states.”

The states also accuse the administration of cutting off the aid without following federal law that dictates how fraud should be identified and sanctioned. The administration “did not engage in any meaningful investigation before taking the draconian step of withholding all funding,” according to the suit.

“The American people are sick and tired of President Trump’s lawlessness, lies, and misinformation campaigns,” California Attorney General Rob Bonta said in a statement. “It is especially pathetic that, once again, his administration’s actions are inflicting harm on the most vulnerable among us.”

The case is State of New York v. Administration for Children and Families, 26-cv-00172, US District Court, Southern District of New York (Manhattan).

(Updates with detail on the programs.)

--With assistance from Catherine Lucey.

To contact the reporters on this story:
Robert Burnson in San Francisco at rburnson@bloomberg.net;
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

John Harney, Anthony Aarons

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