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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, in accordance with a report.
Officers reportedly advised The New York Submit that the Division of Well being and Human Companies (HHS) will freeze funding from the Little one Care Improvement Fund (CCDF), the Momentary Help for Needy Households (TANF) program, and the Social Companies 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 can be withheld from the 5 states, together with practically $2.4 billion from the CCDF and one other $869 million from the Social Companies 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 Companies (HHS) will freeze funding from the Little one Care Improvement Fund (CCDF), the Momentary Help for Needy Households (TANF) program, and the Social Companies Block Grant, affecting California, Colorado, Illinois, Minnesota, and New York over issues the advantages had been fraudulently funneled to non-citizens, in accordance with a report. (Kayla Bartkowski/Getty Pictures)
A 2019 audit by the Division of Well being and Human Companies Workplace of Inspector Basic 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 felony fraud – and state officers agreed to refund the funds and implement corrective controls, in accordance with the report.
Following the discharge of particulars surrounding the potential funding freeze, New York Democrats sharply criticized the Trump administration’s transfer, arguing it might 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 might damage youngsters and low-income households throughout the state.
“Trump is threatening to freeze baby care funding in New York and concentrating on our youngsters for political retribution. It’s immoral and indefensible,” she wrote in a put up on X. “I’m demanding the administration abandon any plans to freeze this funding and cease hurting New York households.”
Alongside along with her put up, Gillibrand additionally shared a public assertion concerning 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 Pictures)
“My religion guides my life and public service. It’s our job to serve the individuals 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 mentioned. “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 little thing 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 youngsters.”
The NY Submit first reported that in December, HHS despatched letters to Walz and Minneapolis Mayor Jacob Frey looking for info on whether or not billions in taxpayer funds might have unlawfully helped “gas 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 — in accordance with the Pew Analysis Heart. The state’s Somali diaspora exceeds 100,000 individuals, 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 Pictures)
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 fireplace 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 individuals — 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 via alleged cash laundering operations involving fraudulent meal and housing applications, daycare facilities and Medicaid companies remains to be being tabulated. However the U.S. lawyer in Minnesota mentioned 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 mentioned that a number of the dozens which have already pleaded responsible within the case used the cash to purchase luxurious vehicles, actual property, jewellery and worldwide holidays, with a number of the funds additionally despatched abroad and doubtlessly into the palms of Islamic terrorists.
Trump addressed Walz’s announcement of leaving the race on Monday, in a put up on Fact Social. “Minnesota’s Corrupt Governor will presumably depart workplace earlier than his Time period is up however, in any occasion, won’t be operating once more as a result of he was caught, REDHANDED, together with Ilhan Omar, and others of his Somali buddies, stealing Tens of Billions of Taxpayer {Dollars},” the president wrote. “I really feel sure the details will come out, and they’ll reveal a critically 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 carried out, for my part, 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.
