The Trump administration has lifted its $10 billion freeze on child care subsidies and social services funding for five states: New York, California, Colorado, Illinois, and Minnesota. This decision followed recurrent setbacks in a lawsuit challenging the halt of federal funds, according to court documents filed on Monday.
This reversal marks a significant defeat for President Trump and his advocates, who sought to exercise presidential power by cutting spending and targeting perceived adversaries. They claimed waste, fraud, and abuse of federal funds, despite lacking clear evidence.
The setback occurred as key Trump officials, including Vice President JD Vance, promoted these claims heavily, gearing up for the midterm elections where the Republican Party faces challenges in maintaining control of Congress.
Last week, the Health and Human Services Department issued nearly identical letters to officials in the affected states. The correspondence informed them that measures aiming to restrict their access to federal funding, planned since January, were now void. The department informed the states they no longer needed to provide data to verify benefit eligibility, breaking from earlier demands.
The administration had faced legal injunctions preventing the execution of the funding freeze. In January and February, a federal judge blocked the pause, allowing the lawsuit to proceed. The freeze could have threatened programs supporting hundreds of thousands of low-income households across the five states.
The administration initially suggested the freeze was due to alleged fraud in Minnesota’s state social safety net programs. However, it has yet to present evidence of similar issues in the other states involved.