On February 6, 2026, Judge Vernon S. Broderick of the Southern District of New York granted a preliminary injunction blocking the Department of Health and Human Services from freezing roughly $10 billion in federal family-assistance funds to five states. HHS had announced the freeze on January 6, citing “serious concerns about widespread fraud and misuse of taxpayer dollars in state-administered programs,” but provided no details or proof for the claim. Every one of the five states targeted was Democratic-led: California, Colorado, Illinois, Minnesota and New York.
The freeze is often described as a child care freeze, but that understates it. Temporary Assistance for Needy Families, the cash-welfare program, accounted for about $7.4 billion of the total. The Child Care and Development Fund made up nearly $2.4 billion and the Social Services Block Grant around $870 million.
Broderick ordered HHS to immediately remove the restrictions on the states' ability to draw down the funds and relieved the states of the document demands the agency had attached to its fraud accusations. At an earlier hearing, he had repeatedly asked the administration's lawyer for evidence of fraudulent use of the funds; at times she said she did not know or did not have that information.
In July 2026, the administration gave up. In a letter sent to the states the week before CNN reported the reversal on July 14, HHS said they would no longer be subject to the funding restrictions and withdrew its requests for justification and additional information, ending a freeze it had spent six months defending in court.
Correction (October 14, 2026): This entry previously said HHS cut off the money on January 5 and 6 in letters dated those days; the sources confirm only that HHS announced the freeze on January 6 in letters to the five governors, and the January 5 date has been removed. It said that on July 14 court filings showed HHS withdrew the January letters; CNN, reporting on July 14, says HHS informed the states in a letter the previous week that the restrictions and information requests were withdrawn. A key fact saying the judge “found no basis for the fraud claims” overstated the preliminary injunction and has been replaced with what the sources report from the hearing.