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The Trump administration has announced a nationwide suspension of child care funding as it launches audits and investigates potential fraud.
WASHINGTON — In a statement released on Wednesday, the Trump administration declared that all states will experience a freeze on child care funds until they can provide enhanced verification of their programs.
While this review affects every state, the Republican administration has directed significant scrutiny toward Minnesota, a predominantly Democratic state, urging an audit of various centers in the wake of several fraud allegations.
Details remain scarce about how much more stringent the new verification processes will be compared to existing measures.
Here’s what you need to know about these funds: who they support, why President Donald Trump is scrutinizing them, and what developments might follow.
What are federal child care funds?
These funds come from the Child Care and Development Block Grant Act of 1990, which is the main federal law governing child care programs for low-income working families.
“The CCDBG Act authorizes discretionary appropriations to support grants to state, territorial, and tribal lead agencies,” Congress’ summary of the act said. “Lead agencies use these funds to subsidize the child care expenses of eligible children and to improve the overall quality and supply of child care.”
The United States Office of Child Care, a federal organization, said states use the funds to “provide financial assistance to low-income families to access child care so they can work or attend a job training or educational program.”
How many people use federal child care funds?
The program helps fund child care assistance for 1.4 million children under age 13, every month, according to the Office of Child Care.
The office estimated roughly 870,900 families receive monthly child care subsidies every month.
Of the 1.4 million children getting assistance, 54% are younger than 5 years old, the office said.
Why are federal child care funds stopped?
U.S. Homeland Security officials conducted a fraud investigation in Minneapolis, questioning workers at unidentified businesses. Trump has criticized Walz’s administration over the cases, capitalizing on them to target the Somali diaspora in the state, which has the largest Somali population in the U.S.
In his post Tuesday, Deputy Secretary of Health and Human Services Jim O’Neill, who is serving as acting director of the Centers for Disease Control and Prevention, referenced a right-wing influencer who posted a video last week claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud.
The Trump administration launched efforts in recent weeks to track down fraud in other programs in Minnesota and is looking at fraud in blue states such as California and New York, White House Press Secretary Karoline Leavitt said in an interview with “Fox & Friends” on Wednesday.
The administration will continue to send officers to investigate “potential fraud sites” in Minnesota and deport undocumented immigrants, Leavitt said, adding that the Department of Homeland Security is considering plans to denaturalize citizens.
O’Neill called the decision a response to “blatant fraud that appears to be rampant in Minnesota and across the country” in a social media post announcing the change on Tuesday.
The Department of Labor is also investigating the state’s unemployment insurance program, Leavitt said. The administration this month threatened to withhold SNAP food aid funding from Democratic-controlled states, including Minnesota, unless they provide information about people receiving assistance.
More verification needed for all states to get child care funds
All 50 states will have to provide additional levels of verification and administrative data before they receive more funding from the Child Care and Development Fund, according to a U.S. Department of Health and Human Services spokesperson. However, Minnesota will have to provide even more verification for child care centers that are suspected of fraud, such as attendance and licensing records, past enforcement actions and inspection reports.
In his social media post on Tuesday, O’Neill said all Administration for Children and Families payments nationwide would require “justification and a receipt or photo evidence” before money is sent, but the HHS spokesperson said Wednesday that the additional verifications only apply to CCDF payments.
The Associated Press contributed to this report.
