Trump Admin Expands Massive Funding Cuts To Blue States Amid Widening Fraud Scandal
The Trump administration has taken decisive action against rampant welfare fraud beyond Minnesota, escalating a long-overdue reckoning for lax oversight under Democrat governance.
Following explosive revelations of massive fraud schemes – many tied to the state's Somali immigrant community – the Department of Health and Human Services (HHS) has not only frozen federal child care payments to Minnesota, but has slashed funding allocated for social services and child care for multiple blue states, affecting programs such as the Child Care Development Fund (CCDF), the Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant, the New York Post revealed Monday.
The Post reports:
At least $7.35 billion in TANF money will be prevented from going to California, Colorado, Illinois, Minnesota, and New York. The CCDF funding block of nearly $2.4 billion affects all those states. Another $869 million from the Social Services Block Grant coffers is being kept from all five states as well. The funding pauses were to be announced via letters to each state sent Monday, citing concerns that benefits were fraudulently going to non-US citizens.
The move comes amid the continuing fallout from viral video by citizen reporter Nick Shirley, who documented dozens of purported child care facilities in Minneapolis that appeared empty or minimally operated yet received millions in taxpayer subsidies.
Last week, HHS Deputy Secretary Jim O'Neill announced the freeze on payments from the Child Care and Development Fund, declaring that future disbursements would require receipts, photos, and justifications to prevent abuse. Minnesota, which receives roughly $218 million annually for its Child Care Assistance Program serving low-income families, now faces heightened scrutiny, including demands for audits of suspect centers.
The Trump administration’s actions aim to address a broader crisis that has ballooned under Gov. Tim Walz’s (D) administration, encompassing the Feeding Our Future scandal – where over $250 million in COVID-era child nutrition funds were allegedly misused.
A bombshell report by Manhattan Institute senior fellow Christopher Rufo and journalist Ryan Thorpe alleged that some diverted funds were transferred abroad – potentially reaching the al-Qaeda-affiliated group Al-Shabaab. The shocking report outlined how perpetrators allegedly diverted at least $250 million to $300 million by claiming to serve millions of children while delivering few or no meals. By late 2025, more than 70 individuals had been charged, with dozens convicted or pleading guilty; many were Somali-Americans. The funds were said to have been used for personal gains, including luxury vehicles and properties in the United States, Turkey, and Kenya.
In a stunning development Monday, Walz announced he would not seek re-election in 2026, citing the need to focus on governance (lol) amid the intensifying scandal that has eroded public trust and drawn fierce criticism of his oversight.
"I've decided to step out of the race and let others worry about the election while I focus on the work," Walz said, insisting his administration has cracked down on fraud but accusing opponents of politicizing the issue to "make our state a colder, meaner place.”
Walz’s decision to forgo another bid for governor represents a major scalp for Rufo, Shirley and independent journalism at large.
We bet it’s only a matter of time until another shoe drops. Will it be in California?
Tyler Durden
Tue, 01/06/2026 – 13:25