Jan 10, 2026 minute read

A judge has blocked President Donald Trump’s funding freeze that would have paused $10 billion in childcare funds from going to five Democrat-led states, which sued the Trump administration over the move. Trump announced the funding freeze after there had been massive fraud revealed in Minnesota, with much of it being linked to the Somali community.

US District Judge Arun Subramanian ordered that the money from three programs in the freeze—Child Care Development Fund, Temporary Assistance to Needy Families, and Social Services Block Grants—have to keep going to the states.

The decision came after five states, California, Colorado, Minnesota, Illinois, and New York, filed a federal lawsuit on Thursday, where the Democratic state Attorneys General argued that the administration has “no statutory or constitutional authority to do this. Nor do they have any justification for this action beyond a desire to punish Plaintiff States for their political leadership. The action is thus clearly unlawful many times over.”

“In the past week, Defendants unilaterally froze all federal funding for three essential programs that serve vulnerable children and their families and individuals with disabilities in the five Plaintiff States, and only in those States: New York, Illinois, California, Colorado, and Minnesota,” the lawsuit adds.

The Democrat politicians argued that the Trump administration had no grounds to freeze the funding and said that the step to do so amid widespread fraud allegations was a “draconian step” for the president to take.

The lawsuit went on to accuse the Trump administration of violating separation of powers in freezing the funding, violating procedural laws, and taking action in excess based on concerns for “potential for extensive and systemic fraud” within various programs where the funding freeze applied.

All of this comes in the wake of an explosive report on fraud in Minnesota from independent journalist Nick Shirley, who alleged that fraud was taking place at several daycare centers that he and another local visited. When they did so in the middle of the day on a weekday, few if any of the daycares appeared to be operational. Those same daycares were subsidized with taxpayers’ funding.

Since the report from Shirley, allegations of fraud taking place in other states have also cropped up. Some reported similar instances of fraud, tied to the Somali community again, in Washington state.