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The Trump administration is transferring to freeze greater than $10 billion in federal baby care and social companies funding to 5 Democrat-led states amid issues taxpayer {dollars} had been improperly diverted to non-citizens, based on a report.
Officers reportedly advised The New York Publish that the Division of Well being and Human Providers (HHS) will freeze funding from the Little one Care Growth Fund (CCDF), the Non permanent Help for Needy Households (TANF) program, and the Social Providers Block Grant, affecting California, Colorado, Illinois, Minnesota, and New York over issues the advantages had been fraudulently funneled to non-citizens.
Greater than $7.3 billion in TANF funding could be withheld from the 5 states, together with almost $2.4 billion from the CCDF and one other $869 million from the Social Providers Block Grant.
The funding pauses had been anticipated to be introduced in letters despatched to state officers Monday, citing issues that advantages had been improperly directed to non-U.S. residents.
ABBOTT ORDERS COMPREHENSIVE FRAUD PROBE INTO TEXAS CHILD CARE FUNDING AFTER MINNESOTA SCANDAL
The Division of Well being and Human Providers (HHS) will freeze funding from the Little one Care Growth Fund (CCDF), the Non permanent Help for Needy Households (TANF) program, and the Social Providers Block Grant, affecting California, Colorado, Illinois, Minnesota, and New York over issues the advantages had been fraudulently funneled to non-citizens, based on a report. (Kayla Bartkowski/Getty Photographs)
A 2019 audit by the Division of Well being and Human Providers Workplace of Inspector Common discovered that New York State improperly claimed $24.7 million in federal reimbursement for baby care subsidies paid to New York Metropolis that didn’t adjust to program guidelines.
The audit attributed the overbilling to system errors and oversight failures – not prison fraud – and state officers agreed to refund the funds and implement corrective controls, based on the report.
Following the discharge of particulars surrounding the potential funding freeze, New York Democrats sharply criticized the Trump administration’s transfer, arguing it could hurt households who depend on baby care help.
MINN. LAWMAKER ‘NOT SURPRISED’ BY WALZ ENDING CAMPAIGN, SAYS THERE WILL BE NO ‘STONE UNTURNED’ IN HEARINGS
Sen. Kirsten Gillibrand, D-N.Y., accused the administration of utilizing the problem for political retaliation and warned it could damage youngsters and low-income households throughout the state.
“Trump is threatening to freeze baby care funding in New York and focusing on our kids for political retribution. It’s immoral and indefensible,” she wrote in a submit on X. “I’m demanding the administration abandon any plans to freeze this funding and cease hurting New York households.”
Alongside together with her submit, Gillibrand additionally shared a public assertion relating to the freezing of funds.
HHS CUTS OFF MINNESOTA CHILD CARE PAYMENTS OVER ALLEGED DAYCARE FRAUD SCHEME
Sen. Kirsten Gillibrand, D-N.Y., spoke out after the Trump administration moved on Jan. 5, 2026, to freeze billions in federal baby care and social companies funding to a number of blue states. (Getty Photographs)
“My religion guides my life and public service. It’s our job to serve the folks most in want and most in danger – it doesn’t matter what state they dwell in or what political social gathering their household or elected representatives belong to,” she stated. “To make use of the facility of the federal government to hurt the neediest Individuals is immoral and indefensible.
“This has nothing to do with fraud and every part to do with political retribution that punishes poor youngsters in want of help,” Gillibrand added. “I demand that President Trump unfreeze this funding and cease this brazen assault on our kids.”
The NY Publish first reported that in December, HHS despatched letters to Walz and Minneapolis Mayor Jacob Frey searching for info on whether or not billions in taxpayer funds could have unlawfully helped “gasoline unlawful and mass migration.”
These requests had been adopted by investigations launched by the Treasury Division and the Home Oversight Committee right into a rising fraud scandal involving a number of nonprofits tied to the Somali group within the Twin Cities.
An estimated 130,000 unlawful migrants had been residing in Minnesota as of 2023 — about 40,000 greater than in 2019 and roughly 2% of the state’s inhabitants — based on the Pew Analysis Heart. The state’s Somali diaspora exceeds 100,000 folks, with most concentrated within the Minneapolis–St. Paul space.
The information on Monday got here the identical day Minnesota Gov. Tim Walz introduced he was dropping his bid for a 3rd time period as governor amid stinging criticism of his dealing with of the state’s huge welfare help fraud scandal.
KAROLINE LEAVITT WARNS ‘PEOPLE WILL BE IN HANDCUFFS’ AS FEDS ZERO IN ON MINNESOTA FRAUD SCANDAL
GOP lawmakers in Minnesota are calling for Gov. Tim Walz to resign over the exploding fraud disaster. (Getty Photographs)
Walz launched his bid for a 3rd four-year time period as Minnesota governor in September, however in latest weeks has been going through a barrage of incoming political hearth from President Donald Trump and Republicans, and a few Democrats, over the large-scale theft in a state that has lengthy prided itself on good governance.
Greater than 90 folks — most from Minnesota’s massive Somali group — have been charged since 2022 in what has been described because the nation’s largest COVID-era scheme.
How a lot cash has been stolen by alleged cash laundering operations involving fraudulent meal and housing applications, daycare facilities and Medicaid companies continues to be being tabulated. However the U.S. lawyer in Minnesota stated the scope of the fraud might exceed $1 billion and rise to as excessive as $9 billion.
MINNESOTA FRAUD SCANDAL INTENSIFIES DEBATE OVER STRIPPING CITIZENSHIP
High quality Studying Heart in Minnesota was discovered on the heart of an alleged childcare fraud scandal within the state. (Madelin Fuerste / Fox Information Channel)
Prosecutors stated that a few of the dozens which have already pleaded responsible within the case used the cash to purchase luxurious automobiles, actual property, jewellery and worldwide holidays, with a few of the funds additionally despatched abroad and probably into the arms of Islamic terrorists.
Trump addressed Walz’s announcement of leaving the race on Monday, in a submit on Fact Social. “Minnesota’s Corrupt Governor will probably depart workplace earlier than his Time period is up however, in any occasion, won’t be working once more as a result of he was caught, REDHANDED, together with Ilhan Omar, and others of his Somali mates, stealing Tens of Billions of Taxpayer {Dollars},” the president wrote. “I really feel sure the information will come out, and they’re going to reveal a significantly unscrupulous, and wealthy, group of ‘SLIMEBALLS.’
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“Governor Walz has destroyed the State of Minnesota, however others, like Governor Gavin Newscum, JB Pritzker, and Kathy Hochul, have performed, in my view, an much more dishonest and incompetent job,” Trump added. “NO ONE IS ABOVE THE LAW!”
Fox Information Digital’s Paul Steinhauser and Andrew Mark Miller contributed to this report.
