Child Care Funding Frozen

Federal action raises questions for programs

People gather for a news conference at the state capitol in St. Paul Minn., on Wednesday, December 31, 2025. (AP Giovanna Dell’Orto)

(AP) The Trump administration has said it is freezing child care funds to all states until they provide more verification about the programs in a move fueled by a series of fraud schemes at Minnesota day care centers run by Somali residents.

All 50 states will be impacted by the review, but the Republican administration is focusing most of its ire on the blue state of Minnesota and is calling for an audit of some of its centers.

Minnesota Democratic Attorney General Keith Ellison said in a statement Wednesday that he was “exploring all our legal options to ensure that critical childcare services do not get abruptly slashed based on pretext and grandstanding.”

It is unclear how much more robust the verification process for states will be than it already has been.

Deputy Secretary of Health and Human Services Jim O’Neill called the decision a response to “blatant fraud that appears to be rampant in Minnesota and across the country” in a social media post announcing the change on Tuesday.

Here are some things to know about these moves:

All 50 states will have to provide additional levels of verification and administrative data before they receive more funding from the Child Care and Development Fund, according to a U.S. Department of Health and Human Services spokesperson. However, Minnesota will have to provide even more verification for child care centers that are suspected of fraud, such as attendance and licensing records, past enforcement actions and inspection reports.

In his social media post on Tuesday, O’Neill said all Administration for Children and Families payments nationwide would require “justification and a receipt or photo evidence” before money is sent, but the HHS spokesperson said Wednesday that the additional verifications only apply to CCDF payments.

The administration launched efforts in recent weeks to track down fraud in other programs in Minnesota and is looking at fraud in blue states such as California and New York, White House Press Secretary Karoline Leavitt said in an interview with “Fox & Friends” on Wednesday.

The administration will continue to send officers to investigate “potential fraud sites” in Minnesota and deport undocumented immigrants, Leavitt said, adding that the Department of Homeland Security is considering plans to denaturalize citizens.

The Department of Labor is also investigating the state’s unemployment insurance program, Leavitt said. The administration this month threatened to withhold SNAP food aid funding from Democratic-controlled states, including Minnesota, unless they provide information about people receiving assistance.

The announcement came a day after U.S. Homeland Security officials conducted a fraud investigation in Minneapolis, questioning workers at unidentified businesses. Trump has criticized Walz’s administration over the cases, capitalizing on them to target the Somali diaspora in the state, which has the largest Somali population in the U.S.

In his post Tuesday, O’Neill, who is serving as acting director of the Centers for Disease Control and Prevention, referenced a right-wing influencer who posted a video last week claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud.

Meanwhile, there are concerns about harassment that home-based day care providers and members of the Somali community nationwide might face amid the vitriol, including Trump’s comments earlier this month referring to Somali immigrants as “garbage.” Washington state Attorney General Nick Brown released a statement saying, “Showing up on someone’s porch, threatening, or harassing them isn’t an investigation. Neither is filming minors who may be in the home.”