US Health Dept. rescinds $10 billion freeze for five Democratic states

HHS $10 billion freeze child care funding Democratic states court block

The Department of Health and Human Services (HHS) has withdrawn a $10 billion freeze on child‑care subsidies, Temporary Assistance for Needy Families (TANF) grants and Social Services Block Grants that had been placed on California, Colorado, Illinois, Minnesota and New York. The freeze, announced in early January, would have restricted drawdowns of roughly $2.4 billion in child‑care aid, $7.35 billion in TANF funding and $869 million in social‑services grants.

Federal judges blocked the pause in January and again in February, finding the agency had acted without state‑specific evidence. On July 13 HHS issued a filing rescinding the January 5‑6 letters and terminating the mechanism that required states to provide data to verify eligibility. The reversal removes the data‑request demands and restores the flow of federal dollars to programs serving low‑income families in the five states.

The move comes amid a broader dispute over the Trump administration’s attempts to withhold congressionally appropriated safety‑net funds from Democratic‑led states, citing alleged fraud. Attorney Rabia Muqaddam, representing the states, said, “Defendants are now taking another tactic to avoid judicial review and the discovery.”