The Trump administration is freezing $10 billion in childcare and welfare funds for five states due to fraud concerns, potentially impacting low-income families and child care providers, with broader implications for the economy and social services.
On the final day of 2025, the Trump administration reversed efforts to deploy federal troops in major cities, froze all childcare payments to states pending legitimate use verification, and was allowed to end Medicaid funding for Planned Parenthood in 22 states. Additionally, the Kennedy Center reportedly changed bylaws to limit voting to Trump-appointed trustees, and stock markets closed near record highs amid economic optimism.
The Department of Health and Human Services has frozen all childcare payments to U.S. states, requiring detailed documentation to ensure funds are used legitimately, amid claims of fraud linked to daycare centers operated by Somali Americans, which has been criticized as part of broader xenophobic attacks by the Trump administration.
Donald Trump criticized Minnesota's governor Tim Walz and Congresswoman Ilhan Omar, blaming them for alleged fraud and criticizing the state's childcare funding freeze, which he linked to broader issues of immigration and fraud, amid political tensions and accusations of misuse of social services.