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A federal judge on Friday temporarily barred the Trump administration from withholding billions of dollars in federal funding for child care and family assistance programs from five Democratic-led states, ruling that the states had shown an immediate need to preserve the status quo while the dispute plays out in court.
U.S. District Judge Arun Subramanian ordered the federal government to continue distributing the funds to California, Colorado, Illinois, Minnesota and New York for at least 14 days. The ruling stops, for now, a policy announced earlier this week by the Department of Health and Human Services to pause funding for three major grant programs.
Subramanian did not rule on the legality of the administration’s actions but said the states met the legal threshold for temporary relief, citing the risk of disruption to essential services for vulnerable families.
The affected programs include the Child Care and Development Fund, which subsidizes child care for low-income families; Temporary Assistance for Needy Families, which provides cash aid and job training; and the Social Services Block Grant, which supports a range of social services. Together, the five states receive more than $10 billion annually from the programs.
States allege unlawful pressure campaign
The states sued after HHS said it had “reason to believe” the five states were providing benefits to people in the country illegally, though the agency did not provide evidence to support the claim or explain why it targeted those states and not others.
In court filings and during a telephone hearing Friday, lawyers for the states argued the funding freeze was unlawful and had already begun causing “operational chaos,” including delayed payments and uncertainty for child care providers.
New York Attorney General Letitia James, who is leading the lawsuit, said the administration’s actions were politically motivated.
“This is a critical victory for families whose lives have been upended by this administration’s cruelty,” James said in a statement following the ruling.
The states also objected to federal demands for extensive personal data, including names and Social Security numbers of individuals who have received benefits dating back to 2022. They argue the requests violate privacy protections and are designed to target political opponents rather than address fraud.
Federal government disputes impact
Jessica Ranucci, an attorney for James’ office, told the court that at least four of the five states had already experienced delayed funding after requesting reimbursements, warning that further disruption could quickly affect families who depend on child care subsidies to remain employed.
A lawyer for the federal government, Kamika Shaw, said she understood that funds had not stopped flowing to states, though she did not address why payments were delayed or why the freeze was imposed without prior notice.
HHS officials did not immediately respond to a request for comment on the court’s order.
The case will continue in the coming weeks, when the judge is expected to consider whether to issue a longer-term injunction blocking the funding pause.
