New York and four other states are suing the Trump administration over a sweeping freeze of more than $10 billion in federal funding for child care and anti-poverty programs, warning the cuts could rapidly disrupt services on which hundreds of thousands of low-income families rely.
The lawsuit, which was filed in federal court in Manhattan, seeks to block the U.S. Department of Health and Human Services from withholding money from three major programs: the Child Care and Development Fund, Temporary Assistance for Needy Families (TANF) and the Social Services Block Grant. Those programs represent about $3.1 billion in federal funding for New Yorkers annually, according to state officials.
The administration announced the freeze in letters this week to New York, California, Colorado, Illinois and Minnesota, following federal scrutiny into the latter state’s child care programs. U.S. officials said the pause was necessary to investigate “potential” fraud. The states, which are all led by Democrats, contend the administration has offered no evidence to justify the action and unlawfully singled them out.
New York Attorney General Letitia James and the other state attorneys general argue the freeze violates federal law and the Constitution by overriding Congress’ power over spending and bypassing required procedures for addressing alleged fraud.
“Once again, the most vulnerable families in our communities are bearing the brunt of this administration’s campaign of chaos and retribution,” James said in a statement. “After jeopardizing food assistance and health care, this administration is now threatening to cut off child care and other critical programs that parents depend on to provide for their children.”
In a post on social media late Thursday night, Health and Human Services General Counsel Mike Stuart said the agency stood by its decision to pause the funds.
“We identified serious concerns in these states that warranted immediate review and action,” he tweeted, adding that “[w]aste, fraud, and abuse will not be tolerated in the Trump administration.”
The U.S. Department of Justice declined to comment on the lawsuit. The White House did not immediately respond to an inquiry.
In New York, the frozen funding includes $2.4 billion in direct cash assistance to more than 200,000 needy families to help cover housing, food and other necessities, according to the attorney general’s office. The state also received $638 million in child care subsidies last year to help low-income parents work or attend school and $93 million through the Social Services Block Grant to support foster care, child welfare and other services aimed at preventing abuse and neglect.
State officials warn even a short-term disruption could harm families. The lawsuit said in New York, some child care funds are typically drawn down every 24 to 48 hours, meaning delays could quickly ripple out to providers and families. The states argue parents could be forced to miss work or leave children in unsafe settings if care options disappear, while providers could be pushed to cut staff or close entirely.
News of confirmed fraud cases in Minnesota social service programs, combined with newer, unsubstantiated allegations tied to child care funding, have captured headlines over the past month. U.S. officials say the funding pause is necessary to ensure benefits are not improperly provided to people ineligible under federal law.
But the states argue existing oversight mechanisms, including regular audits and reporting requirements, already address fraud concerns.
The complaint accuses the Trump administration of failing to follow the statutory processes that govern each program, including notice requirements, audits and opportunities for states to respond before any penalties are imposed. Instead, the states say, federal officials imposed an across-the-board funding freeze based on vague and unsubstantiated allegations.
The lawsuit comes as New York moves to expand access to child care subsidies. State leaders now warn the funding dispute could complicate those plans. New York and other states are also facing federal cuts to health care funding.
James, along with her counterparts in the other four states, is planning to hold a virtual press conference about the lawsuit Friday afternoon.
This story has been updated with additional information.
