US Judge Blocks Trump Administration’s Bid to Freeze $10 Billion in Child Care Funding

US President Donald Trump's administration on Friday was temporarily blocked from freezing roughly $10 billion in federal funding for child care and social services in five Democratic-led states, dealing an early setback to a move that state officials say would have harmed millions of low-income families.

The ruling came hours after Democratic attorneys general from California, Colorado, Illinois, Minnesota and New York filed an emergency lawsuit in the US District Court for the southern district of New York, seeking to halt what they described as an abrupt and unlawful cutoff of federal funds.

The dispute highlights a broader confrontation between the Trump administration and Democratic-led states over federal oversight, funding conditions and allegations of fraud, further heating the battle between the Democrats and the GOP lawmakers; especially Trump loyalists.

Federal Judge, Arun Subramanian ordered Washington to continue releasing money for three key social service programmes serving low-income families and people with disabilities for the next two weeks.

He added that the interim relief was intended to "protect the status quo" while both sides present fuller arguments, reports Axios.

The states argue that the Department of Health and Human Services (DHHS) and its Administration for Children and Families (ACF) froze funding for child care, cash assistance and social services without evidence of wrongdoing, without due process and without legal authority.

The lawsuit further claims that the decision was driven not by any verified fraud findings, but rather by "viral misinformation, political rhetoric and public threats" from President Trump and his senior aides.

According to the complaint, the freeze placed child care programmes, homeless shelters and disability services at immediate risk. "Their transparent motivation is to punish 'Democrat-led' states who are disfavoured by the Administration," the states alleged.

Federal officials have defended the move, calling it a necessary to address the problems of "widespread fraud" plaguing the child care system, with HHS General Counsel Mike Stuart back on Thursday affirming that the department fully stood by its actions "to defend US taxpayers".

"It's unfortunate that these attorneys general are less focused on reducing fraud and more focused on partisan political stunts," Stuart wrote, alleging that the states had been "complicit" in allowing abuse of federal programmes. "Waste, fraud and abuse will not be tolerated in the Trump administration."

State officials strongly rejected that claim. Illinois Attorney General Kwame Raoul called the funding freeze a "cruel and illegal attempt" to play politics with essential services.

"There is no justification for endangering the lives of children and low-income families," he said, adding that he would continue to defend constitutional protections and the rule of law.

While the administration argues it is acting to safeguard public money, the states say the freeze reflects a pattern of using federal spending as a political weapon.

The White House did not immediately respond to a request for comment late Friday. The court is expected to revisit the issue in the coming weeks as arguments continue.