Federal judge blocks White House freeze of childcare subsidies in five Democratic states for now

A federal judge ruled on Friday that the administration cannot withhold federal childcare and related aid from California, Colorado, Illinois, Minnesota and New York for at least 14 days while legal challenges proceed; the pause relates to three grant programs including the Child Care and Development Fund.

A federal judge ruled on Friday that the administration cannot block federal funds for childcare subsidies and other programs from flowing to five Democratic-led states for now. The states — California, Colorado, Illinois, Minnesota and New York — had sued after the Department of Health and Human Services announced a pause on billions of dollars for three grant programs and said it had reason to believe benefits were being granted to people in the country illegally. Judge Arun Subramanian, who was nominated to the bench by Joe Biden, did not decide on the legality of the funding freeze but found the states met the threshold to protect the status quo for at least 14 days. Health department officials did not immediately respond to requests for comment. What is known: - The court order prevents the administration from withholding funds to the five states for at least 14 days while the states' legal challenge moves forward. - The affected programs are the Child Care and Development Fund (which subsidizes care for about 1.3 million children), the Temporary Assistance for Needy Families program, and the Social Services Block Grant. - The five states say they receive more than $10 billion a year from those programs combined. - The Department of Health and Human Services announced the pause saying it had "reason to believe" states were granting benefits to people in the country illegally but did not provide evidence or explain why those states were targeted. - The federal government requested extensive recipient data from the five states, including names and Social Security numbers of people who received benefits since 2022. - Separately, the Agriculture Department announced a freeze of about $130 million a year in funding to Minnesota, citing the state's handling of fraud tied to the Feeding Our Future case, in which federal prosecutors say 78 people were charged and 57 convicted and about $250 million was alleged to have been stolen. Summary: The judge's order restores access to the disputed funds for the five states while the litigation proceeds, reducing immediate uncertainty for programs and providers that rely on the money. The court left the underlying legal questions unresolved and set a 14-day period to maintain the status quo while further arguments are heard. The final outcome will depend on those ongoing court proceedings.