Trump Administration Rescinds Plan to Freeze $10 Billion in Federal Aid

The Trump administration has rescinded its effort to freeze nearly $10 billion in federal childcare and social assistance funding for five Democratic-led states.

The proposal, announced in early January, sought to withhold funding from California, Colorado, Illinois, Minnesota, and New York as part of a broader effort to combat alleged fraud in federal assistance programs.

Days after the funding freeze was announced, a federal judge in New York temporarily blocked the action while legal challenges moved forward.

The Department of Health and Human Services (HHS) had planned to suspend approximately $7.4 billion in funding for the Temporary Assistance for Needy Families (TANF) program, nearly $2.4 billion for the Child Care and Development Fund, and about $870 million from the Social Services Block Grant.

The affected states argued in court that the administration's actions were politically motivated and unconstitutional.

Last week, HHS notified states that it was withdrawing the funding restrictions and rescinding requests for additional documentation related to the programs. The agency had sought information, including whether benefits were being provided to individuals who were not eligible under federal law.

President Donald Trump has made combating fraud in federal programs a central focus of his second term, arguing that abuse costs taxpayers hundreds of billions of dollars annually. Critics, however, contend that many of the administration's fraud claims have been politically driven and unsupported by sufficient evidence.

CNN has reached out to the Department of Health and Human Services for additional comment regarding the decision.