Trump Admin Says It's Cutting Welfare Funds To Blue States Over Alleged Minnesota Fraud

The Trump administration on Monday said it had slashed billions in social services funds to a handful of blue states as part of its escalating response to new and unproven fraud allegations in Minnesota.

The Department of Health and Human Services will freeze $10 billion worth of federal grants to California, Colorado, Illinois, Minnesota, and New York, an HHS official told HuffPost, confirming news first reported by The New York Post.

It’s not clear whether the freeze was inspired by specific fraud allegations or solely for political reasons. Officials did not immediately provide a public explanation.

Minnesota Gov. Tim Walz (D) dropped his bid for a third term on Monday over the fraud allegations, saying, essentially, that he couldn’t campaign, fight actual fraud, and fight fraudulent accusations all at the same time.

The Justice Department has charged dozens of people in Minnesota in a massive fraud scheme that siphoned away $250 million in federal child nutrition funds. The state government has acknowledged its failure to oversee the program properly.

In December, a right-wing YouTuber posted a video alleging similar fraud at several day care centers, claiming the facilities weren’t serving any children. The state said its inspectors vetted the providers and didn’t find violations; the Trump administration has since frozen care payments nationwide.

In the above-mentioned Democrat-led states, the Trump administration will freeze funds under the Child Care and Development Fund, the Social Services Block Grant and the Temporary Assistance for Needy Families program, or TANF, the federal antipoverty program most closely associated with the word “welfare.” The program provides benefits, including cash payments, to nearly a million families nationwide.

Josh McCabe, director of social policy at the centrist Niskanen Center, said the reported freeze of $7.35 billion in TANF money for California, Colorado, Illinois, Minnesota, and New York amounts to the entire annual grant allotment for those states.

“It will achieve nothing and undermine actual efforts to reduce improper payments and protect program integrity,” McCabe said on X.

It’s not clear what led the administration to clamp down on TANF in a handful of blue states, since the program was not implicated in Minnesota’s child nutrition fraud or the YouTube video, but it’s clear the White House wants to trumpet a fraud narrative that’s been damaging for Democrats — especially former vice-presidential candidate Walz.

“Donald Trump and his allies — in Washington, in St. Paul, and online — want to make our state a colder, meaner place,” Walz said in his announcement Monday.