The Trump administration has proceeded to cut over $10 billion in funding for social service programs in five states governed by the Democratic Party, citing concerns that the money could be used fraudulently.
U.S. government officials told the New York Post on Monday, 5 Jan 2026 GMT+7, that a Trump task force is cutting more than $10 billion in social service and childcare support funds allocated to five Democratic-led states, citing concerns that these benefits could be misused by being passed on to individuals without U.S. citizenship.
The Department of Health and Human Services (HHS) will withhold taxpayer-funded budgets from the Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant program.
At least $7.35 billion from TANF funding will be blocked from reaching California, Colorado, Illinois, Minnesota, and New York, while nearly $2.4 billion from the CCDF and another $869 million from the Social Services Block Grant will also be withheld from these five states.
The suspension of these funds will be announced via letters sent to each state on Monday, citing concerns that the benefits are being misused by being passed on to individuals who are not U.S. citizens.
This latest move by the Trump administration follows a discovery by the HHS Office of Inspector General over six years ago that New York City improperly claimed over $24.7 million in federal childcare subsidies.
Additionally, the New York Post previously reported that last December, HHS sent letters to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey inquiring whether billions in tax dollars had facilitated illegal immigration and a large influx of undocumented migrants.
Those inquiries led to investigations by the Treasury Department and the House Oversight Committee into escalating fraud scandals involving nonprofits linked to the Somali community in the Minneapolis and St. Paul area, known as the "Twin Cities."
According to data from the Pew Research Center, as of 2023, there are approximately 130,000 undocumented immigrants living in Minnesota, an increase of about 40,000 since 2019, representing roughly 2% of the state's population, mostly residing in the Minneapolis-St. Paul area.
Federal prosecutors have charged and penalized dozens of individuals involved in the theft of $250 million by one Somali-linked organization called "Feeding Our Future," which misappropriated funds to purchase luxury vehicles and real estate.
Meanwhile, Joe Thompson, U.S. Assistant Attorney for Minnesota, later alleged, “The severity of this issue is not overstated,” claiming that criminals have embezzled as much as $9 billion.
“What we see in Minnesota is not just a few bad actors committing crimes, but an industrial-scale fraud that is truly shocking,” Thompson told reporters at a press conference on 18 Dec.
Later, popular YouTuber Nick Shirley increased pressure by inspecting about 10 childcare centers in the state, which had received $111 million in tax funds. A report by the Minnesota Star Tribune later confirmed that less than half of these centers appeared to be genuinely operational.
Governor Walz acknowledged concerns about fraud during a Monday press conference, where he also announced he would not seek a third term as governor.
“We cannot effectively run programs and services if we cannot build public trust,” Walz said, countering President Trump by adding, “We will win the fight against criminals, but the political games we are seeing from Republicans only make that fight harder.”
In response, Trump posted on Truth Social Monday, saying, “The corrupt governor of Minnesota may be forced out before his term ends, but either way, he won’t run again because he was caught red-handed along with Ilhan Omar and his other Somali friends stealing tens of billions in tax dollars.”
“I am confident that the truth will come out, revealing a group of shamelessly immoral and extremely wealthy sycophants,” the president concluded.
Meanwhile, Senator Kirsten Gillibrand of New York, a Democrat, strongly condemned the funding cuts, calling them “an immoral and unacceptable use of government power to harm the most vulnerable Americans.”
“This is not about fraud, but political revenge that punishes poor children in need of help. I call on President Trump to rescind this funding freeze and stop shamelessly attacking our children,” Gillibrand said in a statement.
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Source:nypost