A federal judge on Friday ordered the Trump administration to continue providing billions of dollars in social service funding to five Democratic-led states, rejecting an attempt to withhold the money over unproven fraud claims.
U.S. District Judge Vernon Broderick in New York granted a preliminary injunction preventing the federal government from cutting off funds while a lawsuit filed by the states moves forward. Broderick, who was nominated to the bench by former President Barack Obama, ruled that the administration must maintain payments to key programs that support child care and low-income families.
The decision applies to California, Colorado, Illinois, Minnesota and New York. Together, those states receive more than $10 billion annually through the affected programs.
The lawsuit challenges efforts by the U.S. Department of Health and Human Services (HHS) to withhold funding for the Child Care and Development Fund, Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant. The programs provide child care subsidies, cash assistance, job training, and a range of other services to millions of Americans.
The Child Care and Development Fund alone helps subsidize care for approximately 1.3 million children nationwide.
Friday’s ruling extends two earlier temporary orders that had already prevented the administration from stopping the payments. The latest of those orders was set to expire the same day.
Attorneys representing the federal government did not immediately respond to requests for comment. A spokesperson for the U.S. Attorney’s Office for the Southern District of New York declined to comment on the decision.
State leaders welcomed the ruling, calling the attempted funding freeze unlawful and harmful.
“Every day, hundreds of thousands of New Yorkers rely on these funds to pay for necessities and provide their children a safe place to learn,” New York Attorney General Letitia James said in a statement. “This illegal funding freeze would have caused severe chaos in the lives of some of the most vulnerable families in our state.”
California Attorney General Rob Bonta echoed those concerns. “The Trump Administration’s actions are not only unlawful — they are cruel, targeting the most vulnerable among us,” Bonta said.
The administration initially justified the funding cutoff by claiming there was “reason to believe” that some states were providing benefits to people living in the U.S. illegally. HHS did not provide evidence to support those claims.
During court proceedings, however, federal attorneys acknowledged that the concerns were based largely on media reports rather than verified findings of fraud.
The government has also offered shifting explanations for its actions. While HHS originally announced that it had “frozen” the funds, lawyers later told the court that the money had not technically been halted. Instead, they said, the administration was demanding additional documentation from the states before allowing payments to continue.
Federal officials have requested detailed records from the states, including names and Social Security numbers of program beneficiaries.
Advocates for low-income families warned that any interruption in funding could have devastating consequences. Child care providers that rely on subsidies could be forced to lay off workers or shut down entirely, leaving families without reliable care.
Loss of child care, experts say, can make it difficult or impossible for parents to keep their jobs, creating ripple effects throughout local economies.
Minnesota has faced particular scrutiny from the administration due to past fraud cases involving social service programs, including several linked to members of the state’s Somali community. In response, the federal government has imposed heightened reporting requirements on Minnesota as well as the other four states involved in the lawsuit.
Beyond those states, the administration has ordered all states to provide additional documentation about how they are using child care funds before accessing further payments.
For now, Judge Broderick’s ruling ensures that assistance will continue uninterrupted as the legal fight plays out. The underlying lawsuit is expected to take months to resolve, setting up a broader battle over federal authority and social service funding.
