Trump administration ends attempt to freeze $10B in federal funds for blue states

By Tami Luhby, CNN

(CNN) — The Trump administration has rescinded its effort to freeze $10 billion in childcare and social assistance funding for five blue states — the latest setback in its push to withhold or cut federal funding to fight alleged fraud and to punish perceived opponents.

The freeze was announced in early January amid a high-profile federal probe into fraud allegations involving federal social services in Minnesota and was paused by a federal judge in New York days later.

President Donald Trump has focused heavily on combatting fraud in his second term, making it a focal point of the midterm elections in November as Republicans seek to maintain their control of Congress. While one government analysis estimates that hundreds of billions of dollars are lost annually to fraud, the president’s critics argue the accusations are largely political and often lack proof.

In this case, the Department of Health and Human Services had sought to cut off $7.4 billion in funding for the Temporary Assistance for Needy Families (TANF) program, which provides cash assistance to households, along with nearly $2.4 billion for the Child Care and Development Fund and around $870 million from the Social Services Block Grant.

The action was directed at California, Colorado, Illinois, Minnesota and New York, where the programs serve many low-income families.

The states quickly sued, arguing the administration’s effort was entirely political, as well as unconstitutional.

In a letter sent to states last week, HHS said they would no longer be subject to the requirements that attempted to restrict their access to federal funding. Also, the agency was withdrawing its requests for justification and additional information, which included looking at whether benefits were improperly provided to ineligible immigrants.

CNN has reached out to HHS for additional information.

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