President Donald Trump has accused those behind what he called a massive fraud scheme in Minnesota of stealing not only from the state but from the entire country. Speaking to reporters on Sunday, Trump said the amount lost could be as high as $19 billion and claimed members of the Somali community were central to the alleged wrongdoing. He argued that American taxpayers should not be responsible for covering the losses and said state leaders should be held accountable instead.
Trump said the federal government would no longer continue funding states he believes have failed to properly manage public assistance programs. He specifically mentioned Minnesota Governor Tim Walz, along with California and Illinois, saying the federal government would stop paying until the issue is addressed. Shortly after his remarks, the Trump administration moved to block several Democrat-led states from accessing billions of dollars in federal child care and family assistance funds.
On Tuesday, the Department of Health and Human Services announced it had frozen access to more than $10 billion in funding for California, Colorado, Illinois, Minnesota, and New York. The blocked funds include nearly $2.4 billion from the Child Care and Development Fund, $7.35 billion from the Temporary Assistance for Needy Families program, and $869 million from the Social Services Block Grant program. These programs support child care services, low-income families, and other social welfare efforts.
HHS officials said the decision was driven by concerns over fraud and misuse of funds. Deputy Secretary Jim O’Neill said families who depend on these programs deserve assurance that taxpayer money is being used legally and for its intended purpose. He added that the funding pause reflects the administration’s focus on accountability, financial responsibility, and strict compliance with federal rules.
Alex Adams, the HHS Assistant Secretary who leads the Administration for Children and Families, echoed those concerns. He said the federal government has a duty to make sure assistance programs truly benefit the families they were designed to help. According to Adams, when there are serious and credible concerns about fraud, the government must step in and take action to protect public resources.
HHS said the funding freeze will remain in place until the Administration for Children and Families completes a full review and determines that the affected states are following federal requirements. In addition, the administration announced it is ending a policy introduced during the Biden era that allowed child care centers to receive payments upfront without first verifying attendance. Officials argued that this practice made programs more vulnerable to abuse and fraud.
The decision sparked strong backlash from Democratic leaders in the affected states. Many accused the Trump administration of punishing children and low-income families rather than addressing fraud in a targeted way. New York Governor Kathy Hochul called the move vindictive and cruel, vowing to challenge it aggressively. She said cutting off funds would hurt families who rely on child care and social services to survive.
Senator Kirsten Gillibrand of New York also criticized the move, arguing that it had little to do with fraud and more to do with political retaliation. She said vulnerable children and families were being unfairly targeted. Illinois Governor J.B. Pritzker warned that thousands of working parents in his state depend on child care programs to stay employed and make ends meet, and said the funding freeze puts their livelihoods at risk.
Colorado Senator Michael Bennet went even further, accusing Trump of waging a political attack on his state. He said the funding pause would strip critical support from families who need help paying for basic necessities like food, housing, and health care.
Trump has repeatedly raised concerns about fraud in state-run assistance programs. He first highlighted the issue during a New Year’s Eve event, saying Minnesota was not alone and claiming that California, Illinois, New York, and other states had even bigger problems. He described the situation as a nationwide scam and promised his administration would investigate and expose misuse of public funds wherever it exists.
