New York is leading four other states in suing the Trump administration over a freeze of more than $10 billion in federal funding for child care and anti-poverty programs.
The lawsuit, filed Friday in U.S. District Court in Manhattan by Attorney General Letitia James, seeks to block the U.S. Department of Health and Human Services from withholding money from New York, California, Colorado, Illinois, and Minnesota amid ongoing federal scrutiny into the child care programs. Trump administration officials have said the pause was necessary to investigate “potential” fraud.
James and the other AGs argue the freeze is “arbitrary and capricious” and violates federal law and the U.S. Constitution by usurping Congress’ power over spending and bypassing long-established procedures for probing allegations of fraud.
The AGs claim in the 41-page complaint that the Trump administration has “publicly stoked allegations of fraud” to claim that the five states are providing unlawful benefits to undocumented immigrants, “regardless of whether they have been substantiated.”
They said the allegations are being used “as a pretextual justification to punish perceived political enemies of the Trump Administration by unlawfully withholding critical funding pending purported fraud detection measures unauthorized by any statute.”
“Defendants have said that the ACF Funding Freeze is necessary to root out ‘potential’ fraud, but this is pretext,” the AGs wrote in the complaint. “Their transparent motivation is to punish “Democrat-led” states who are disfavored by the administration.”
Earlier this week, HHS announced that it was withholding money from three federally funded programs: the Child Care and Development Fund, Temporary Assistance for Needy Families and the Social Services Block Grant in the five Democratic-led states. The agency said the funding pause is necessary to ensure benefits are not improperly given to undocumented immigrants and others who are ineligible under federal law.
“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” Deputy HHS Secretary Jim O’Neill said in a statement. “This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.”
In New York, the funding includes $2.4 billion in cash assistance to more than 200,000 families to help cover housing, food and other necessities, according to the James’ office. The federal government also provided the state with $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 for services aimed at preventing abuse and neglect, James said.
In the lawsuit, the attorney general said the freeze on funding could lead to disruptions for families that depend on the funding for childcare services and force some child care providers out of business.
“Once again, the most vulnerable families in our communities are bearing the brunt of this administration’s campaign of chaos and retribution,” she said. “After jeopardizing food assistance and health care, this administration is now threatening to cut off childcare and other critical programs that parents depend on to provide for their children.”
The legal fight over the funding comes as New York moves to dramatically expand childcare programs, with Gov. Kathy Hochul and New York City Mayor Zohran Mamdani on Thursday unveiling a $1.7 billion initiative that will provide universal childcare for two-year-olds in the city. Hochul said the spending is part of broader efforts to expand universal child care statewide.
