Five Democratic-led states filed a lawsuit Thursday challenging the Trump administration’s decision to freeze roughly $10 billion in federal funds for key social safety net programs, saying the move was unconstitutional and put vulnerable families at risk.
California, New York, Minnesota, Illinois and Colorado are asking a federal court to block the freeze. They claim that the Department of Health and Human Services overstepped its authority by withholding money Congress already approved for anti-poverty programs.
New York Attorney General Letitia James, leading the lawsuit, said the freeze was political punishment rather than legitimate enforcement. “Once again, the most vulnerable families in our communities are bearing the brunt of this administration’s campaign of chaos and retribution,” she said in a statement released by her office.
5 states including NY are suing the Trump admin over a sweeping freeze of $10B+ in federal funding for child care & other programs, warning this could rapidly disrupt services for hundreds of thousands of low-income families (via @RyanKost for @gothamist) https://t.co/O7SNxUKihZ
— Andrew Giambrone (@AndrewGiambrone) January 9, 2026
The suit centers on three major federal programs: the Child Care and Development Fund, which subsidizes care for low-income families; the Temporary Assistance for Needy Families program, providing cash aid and job support; and the Social Services Block Grant, which funds a range of state services.
Altogether, HHS has frozen about $7.35 billion in TANF funds, nearly $2.4 billion in child care funding, and around $869 million in block grant money.
California Attorney General Rob Bonta said the letters from HHS demanded an extraordinary amount of data — including names and Social Security numbers — turning routine oversight into an undue burden. “That is deeply concerning and also deeply frustrating,” he said.
According to the Associated Press, the Trump administration told the states it froze the money because it had “reason to believe” benefits were going to individuals in the country illegally, but offered no clear evidence linking the allegations to most of the states involved.
Illinois Attorney General Kwame Raoul and four other state attorneys general are suing the Trump administration over frozen social services funding. California, Colorado, Minnesota, Illinois and New York called the move an unconstitutional abuse of power. https://t.co/A6aK97LRoq
— CBS Chicago (@cbschicago) January 9, 2026
The legal challenge comes amid broader political fights over welfare spending and fraud.
The government’s focus on child care fraud intensified after a conservative YouTuber posted a video alleging millions in improper claims tied to centers serving Minneapolis’ Somali community. Even so, critics say that spike in scrutiny has been used to justify nationwide punitive action.
“HHS has not provided any evidence at all to support those claims,” Bonta said, echoing state officials who contend the freeze is unsupported and heavy-handed.
New York’s James warned the freeze would jeopardize programs that families rely on every day. “Freezing these funds will immediately jeopardize some of the most important anti-poverty programs in the states, putting vulnerable families at risk,” she said.
Ironically those 5 states are all donor states; they pay more in federal taxes than they receive in federal funding, all 5 states should withhold the same 10 billion they aren’t getting from the government. https://t.co/1a3DPMaTPi
— Elijah Alexander (@EliTVScreen) January 7, 2026
California Gov. Gavin Newsom pushed back against the fraud accusations. Taking to X, he tweeted, “Rather than making up fraud numbers, why don’t you listen to the Republican congressmen from California calling for the President to act on federal aid to support ongoing rebuilding efforts?” He also noted that California remains engaged in rebuilding after last year’s destructive wildfires and that federal assistance has lagged.
On the other side of the fence, White House press secretary Karoline Leavitt told reporters that the president has directed federal agencies to scrutinize spending programs not just in Minnesota, where an expansive welfare fraud scandal has made headlines, but also in states like California. She said the aim is to identify fraud and prosecute wrongdoers “to the fullest extent of the law.”
Whether that line of defense will hold up in court remains to be seen.
For now, the states are holding the line that withholding billions from social programs amounts to punishing families for political disputes they didn’t start.
