REPORT: Judge blocks Trump effort to withhold child care funds from states over fraud allegations

January 10, 2026

A federal judge ruled Friday that President Donald Trump’s administration cannot block federal money for child care subsidies and other programs aimed at supporting needy children and their families from flowing to five Democratic-led states for now.

The states of California, Colorado, Illinois, Minnesota and New York argued that a policy announced Tuesday to freeze funds for three grant programs is having an immediate impact on them and creating “operational chaos.” In court filings and a hearing earlier Friday, the states contended that the government did not have a legal reason for holding back the money from those states.

The U.S. Department of Health and Human Services said it was pausing the funding because it had “reason to believe” the states were granting benefits to people in the country illegally, though it did not provide evidence or explain why it was targeting those states and not others.

The programs in question are the Child Care and Development Fund, the Temporary Assistance for Needy Families program, and the Social Services Block Grant.

U.S. District Judge Arun Subramanian, a Biden appointee, stated that the states had met a legal threshold to preserve the current situation for at least 14 days to allow for ongoing arguments presented in court. However, he refrained from making a ruling on the legality of the funding freeze.

A federal judge has temporarily halted the Trump administration’s plans to withhold $10 billion in child care and family assistance funds from Illinois and four other states.https://t.co/EHQvSBlStc

— Chicago Tribune (@chicagotribune) January 10, 2026