The Trump administration has implemented a nationwide freeze on federal child care funding, demanding all 50 states provide enhanced verification and administrative data before payments resume. This dramatic move, announced on Tuesday 31 December 2025, was directly prompted by a series of alleged fraud schemes at day care centres in Minnesota operated by Somali residents.
Nationwide Freeze with Sharp Focus on Minnesota
While every state will be affected, the administration is concentrating its scrutiny on Minnesota, a Democratic-leaning state. Deputy Secretary of Health and Human Services, Jim O'Neill, stated the action was a response to "blatant fraud that appears to be rampant in Minnesota and across the country".
For Minnesota to have its funding restored, it must meet even more rigorous demands than other states. These include providing extensive documentation for centres suspected of fraud, such as attendance records, licensing details, past enforcement actions, and inspection reports. The administration has also called for an audit of certain Minnesota providers.
Political Reactions and Broader Investigations
Minnesota Governor Tim Walz, the 2024 Democratic vice-presidential nominee, accused the Trump administration of politicising the issue. "He's politicising the issue to defund programs that help Minnesotans," Walz said in a social media post. State Senate Majority Leader Erin Murphy warned the decision could force a collapse of the state's already stressed child care system.
The administration signalled that its fraud crackdown could extend beyond child care. White House Press Secretary Karoline Leavitt indicated similar investigations are being considered in other Democratic states like California and New York. Furthermore, the Department of Labour is probing Minnesota's unemployment insurance programme.
Community Impact and Harassment Concerns
The announcement followed a fraud investigation by Homeland Security officials in Minneapolis. The move capitalises on allegations targeting the state's large Somali diaspora. O'Neill referenced a right-wing influencer's claim of up to $100 million in fraud at Somali-run day cares in Minneapolis.
This has raised significant concerns about harassment. Washington state Attorney General Nick Brown issued a statement condemning the harassment of home-based day care providers, some from the Somali community, who have been falsely accused. The vitriol follows Trump's recent comments referring to Somali immigrants as "garbage".
The full impact and duration of the funding freeze remain unclear, leaving thousands of families and providers across the United States in a state of uncertainty.
