Working parents, child care center operators and their advocates have all reacted with alarm to the Trump administration’s plan to withhold federal child care funding from blue states, warning that low-income families and child care workers will bear the brunt of a political attack.
The administration has notified California, Colorado, Minnesota, Illinois and New York that it is suspending around $10 billion in funds due to unproven allegations of systemic fraud in several social welfare programs. The Department of Health and Human Services said it won’t release the money until it completes a review based on years of data the states must provide.
Christina Killion Valdez, who runs a child care center in Rochester, Minnesota, said the freeze would force operations like hers to cut slots for families in need and to lay off staff. Around 23,000 kids in Minnesota benefit from the state’s child care assistance program, which passes federal money along to child care centers that serve low-income families.
“That’s thousands of parents that will not be able to go to work,” Killion Valdez said on a call Wednesday hosted by the Child Care for Every Family Network, an advocacy group. “These are parents that are often working second and third jobs, and they still can’t get ahead because the cost of everything is increasing while their wages are not.”
She noted that child care centers typically operate on thin margins, and the loss of any funding could force some to close.
“We literally save empty paper towel rolls for our art projects,” Killion Valdez said. “If the children we serve lose their tuition assistance, it will destabilize our entire budget.”
In letters, the administration demanded the blue states hand over information about beneficiaries to prove they’re not illegal immigrants and told the states they’d be unable to draw down funding, citing “recent federal prosecutions and additional allegations” of fraud — a reference to a welfare fraud scandal in Minnesota.
“That’s thousands of parents that will not be able to go to work.”
– Christina Killion Valdez, Minnesota child care provider
“The application of whatever happened there to these other states is entirely unclear, and they’ve asserted in these letters they sent to the five states that they have reason to believe that payments are going to non-documented individuals,” Nick Gwyn, a senior fellow with the Center on Budget and Policy Priorities, a liberal think tank, told HuffPost. “They haven’t provided any illustration of what has led them to that belief, or any data or information or research.”
Rep. Jason Smith (R-Mo.), chair of the House committee that oversees the targeted federal programs — the Child Care and Development Fund, the Social Services Block Grant and the Temporary Assistance for Needy Families program — suggested generalized fraud concerns in light of recent developments in Minnesota justify the freeze in other states.
“There’s no question that there’s been billions of dollars stolen and fraud in states like Minnesota and also California, and those are two of the states that’s been frozen,” Smith told HuffPost. “It’s important for any administration to make sure tax dollars are spent appropriately and without fraud.”
Patrick Smith via Getty Images
The top Democrat on Smith’s committee said this week’s aid shutoff was pure retaliation. “I’m never surprised at the lengths that the administration will go to to punish anybody they think disagrees with them,” Rep. Richard Neal (D-Mass.) told HuffPost.
The programs collectively serve only a few million people nationwide, mostly parents of young children. The money is distributed to states through federal “block grants,” with the funds then given to smaller state and local governments and local nonprofits that actually administer child care and other programs.
The HHS letters, copies of which were obtained by HuffPost, ask states to fork over “the complete universe” of administrative data on all grant recipients for the last three years, right down to Social Security numbers and everything that was done to verify recipients’ eligibility for assistance.
Ruth Friedman, a child care expert at the left-leaning Century Foundation, said it might not be easy to satisfy the administration’s demands.
“What’s concerning in reading those letters is that the states very likely do not have that data on hand, because it is not data that the federal government has required them to report previously,” she said.
While the threat of fraud in the targeted states appears to be entirely theoretical, there have been some well-documented cases in Minnesota. The Justice Department has charged dozens of people in the state over an alleged scheme in which fraudsters made off with some $250 million in child nutrition funds, and Minnesota’s top federal prosecutor said last month he’d uncovered potentially billions more in Medicaid fraud in the state.
“What’s happened has totally devastated our entire community and put us back, like, 10 million steps in terms of what we’re fighting for in this state.”
– Lydia Boerboom, an organizer at Kids Count On Us
A conservative YouTuber amplified the fraud storyline late last month by releasing a video alleging several Minnesota care centers he visited that are run by Somali immigrants were taking federal money while not caring for kids. The state said it recently inspected the facilities and found them to be operating as normal. Nevertheless, Minnesota’s Democratic governor, Tim Walz, announced Monday he wouldn’t seek reelection.
Lydia Boerboom, an organizer at Kids Count On Us, a Minnesota-based nonprofit that advocates for child care funding, said the vast majority of care providers are aboveboard and want any fraud rooted out of the system. She said it was “inhumane” to withhold funding from them when there’s “no credible evidence” of widespread fraud.
“What’s happened has totally devastated our entire community and put us back, like, 10 million steps in terms of what we’re fighting for in this state,” Boerboom said, referring to the right-wing frenzy of recent days. “There has been a very coordinated effort to make sure that child care is being defunded at every level possible right now.”
Elliot Haspel, an expert on early childhood education, said allegations of widespread fraud in the Minnesota child care system date back to at least 2019. Investigators did find fraud — “nowhere near the epidemic levels” being alleged now, he said — prompting new oversight protocols and reforms like attendance and recordkeeping requirements for providers. A recent audit by HHS’s inspector general found there are still inaccuracies in that reporting system.
But cutting off funds to Minnesota and other states now seems wildly out of proportion to whatever issues might exist, Haspel said.
“When you take such a giant boulder down the hill in an attempt to solve a problem — a problem that, quite frankly, there’s not a lot of evidence exists anymore — you are doing a ton of collateral damage,” Haspel said.
Concern over the freeze has spread to families well beyond Minnesota. Shazia Khalid, a child care advocate with the group Moms Rising, said other parents in her WhatsApp group are “panicked” over whether they’ll continue to have slots for their children.
“So many programs are already hanging on by a thread, and I’m fearful of what this could mean for my family and for other working families in my community,” Khalid said. “Our children’s care and education should never be used as a political pawn.”
Correction: The original story misspelled Elliot Haspel’s first name.