A federal judge ruled on Friday that the Trump administration cannot block federal money for childcare subsidies and other programs aimed at supporting low-income families with children from flowing to five Democratic-led states for now.
The states of California, Colorado, Illinois, Minnesota and New York argued that a policy announced on Tuesday to freeze billions of dollars in funds for three grant programs was having an immediate impact on them and creating “operational chaos”. In court filings and a hearing earlier on Friday, the states contended that the government did not have a legal reason for withholding the money from them.
The US Department of Health and Human Services said it was pausing the funding because it had “reason to believe” the states were granting benefits to people in the country illegally, though it did not provide evidence or explain why it was targeting those states and not others.
US district judge Arun Subramanian, who was nominated to the bench by Joe Biden, did not rule on the legality of the funding freeze but said the five states met a legal threshold “to protect the status quo” for at least 14 days while arguments are made in court.
Health department officials did not immediately respond to a request for comment.
The affected programs are the Child Care and Development Fund, which subsidizes childcare for 1.3 million children from low-income families; the Temporary Assistance for Needy Families program, which provides cash assistance and job training; and the Social Services Block Grant, a smaller fund that provides money for a variety of programs.
The five states say they receive a total of more than $10bn a year from the programs.
New York’s attorney general, Letitia James, who is leading the lawsuit, called the ruling a “critical victory for families whose lives have been upended by this administration’s cruelty”.
The government had requested reams of data from the five states, including the names and social security numbers of everyone who received benefits from some of the programs since 2022.
The states argue that the effort is unconstitutional and is intended to go after Trump’s political adversaries rather than to stamp out fraud in government programs – something the states say they already do.
Jessica Ranucci, a lawyer in James’s office, said during the Friday hearing that at least four of the states had already had money delayed after requesting it. She said that if the states cannot get childcare funds, there will be immediate uncertainty for providers and families who rely on the programs.
A lawyer for the federal government, Kamika Shaw, said it was her understanding that the money had not stopped flowing to states.
The other 45 states face a new requirement to check attendance at childcare centers and submit “strong justification for the use of funds” that aligns with the program’s purpose.
At about the same time the judge stopped the freeze on the childcare subsidies, the US agriculture secretary, Brooke Rollins, announced that the administration would freeze about $130m a year in funding from her agency to Minnesota.
Rollins said the state’s inability to stop fraud schemes led to the decision. Seventy-eight people have been charged since 2022 – and 57 convicted – after federal prosecutors said the Minnesota non-profit group Feeding Our Future stole $250m from a program meant to feed children in need during the Covid-19 pandemic.
The office of Minnesota’s governor, Tim Walz, did not immediately have a comment on Friday evening. The state’s attorney general, Keith Ellison, said he’d fight the new freeze of funds in court.
In a letter to Walz that Rollins shared on social media, she suggested the state could restore its access to the funding by providing justification for how it spent federal dollars over the past year. All the state’s future transactions involving money from the agency will require the same justification, she said.
Walz and Minnesota have become a main target of the administration in Trump’s second term.
Last month the president called the state’s Somali population “garbage” in the wake of the Feeding Our Future investigation and other fraud cases involving Somali defendants.
And this week the administration launched the largest immigration enforcement operation in history in Minneapolis, leading to a fatal shooting of a woman by an Immigration and Customs Enforcement agent.
