A federal judge ruled Friday that President Donald Trump's administration cannot block federal money for child care subsidies and other programs aimed at supporting low-income families with children from flowing to five states for now.
The five states filed the lawsuit in New York district court Thursday, claiming the temporary cuts to childcare and social services would hurt vulnerable families.
U.S. District Judge Arun Subramanian did not rule on the legality of the funding freeze but said the five states met a legal threshold “to protect the status quo” for at least 14 days while arguments are made in court.
U.S. Health and Human Services (HHS) provides Minnesota with $185 million in child care funding each year, according to Assistant Secretary Alex Adams, who oversees the program.
The lawsuit claims the Trump administration exclusively targeted the five Democratic-led states because of “serious concerns about widespread fraud and misuse of taxpayer dollars” but provided no evidence to support the claims.
California is spearheading the lawsuit, making it the 53rd lawsuit filed by the state against the administration in less than a year.
The funding paused affects the federal Temporary Assistance for Needy Family (TANF) programs, Child Care and Development Fund (CCDF), and the Social Services Block Grant funds.
The states suing the HHS claim they use the federal program funds to offer cash aid and services to families, provide funding for childcare, social services, welfare, foster care, and deaf access. California also uses the funds to pay for its state welfare program to give out cash aid, childcare, and other services, Bonta said.
The HHS sent letters to the five states this week asking them to turn over all documents related to their use of the billions of dollars in federal funding they receive for programs involved in the freeze. States were also asked to include identifying information for the millions of residents involved in the programs.
HHS also noted in the letters they suspected the states were providing illegal immigrants with benefits intended for American citizens and lawful permanent residents, but did not give them evidence to back up the claim, according to the lawsuit.
In the lawsuit, the states allege the funding freeze exceeds federal authority, usurps and infringes on Congress’s legislative powers, imposes new conditions on funds for states without notice.
New York Attorney General Leticia James said the federal funds provide essential support for hundreds of thousands of families in the state each year.
New York receives over $2.4 billion in TANF funds, which provides direct cash assistance to over 200,000 families throughout the state to pay for housing, food, and other essentials, according to James.
New York also received $638 million in CCDF funds in 2025 to provide childcare for low-income families, and $93 million in SSBC funds for foster care, childcare, and other social services to prevent neglect, abuse, and exploitation of children and vulnerable adults.
The HHS has placed a hold on the funds until the five states provide data and implement fiscal accountability requirements. The states will also be undergoing a federal program review of their use of federal funding, according to the lawsuit.
HHS General Counsel Mike Stuart has defended the agency’s decision to freeze the funds, saying there have been “serious concerns” in the states that warranted immediate review and action.