A coalition of five U.S. states has filed a federal lawsuit challenging former President Donald Trump’s administration for freezing nearly $10 billion in childcare and family assistance funding, arguing that the move violates federal law and threatens critical support for working families and low-income households.
The lawsuit, filed in federal court on Thursday, targets the administration’s decision to halt disbursement of funds authorized by Congress for childcare subsidies, early education programs, and family support services. The states contend that the freeze was imposed without proper legal justification and directly undermines programs designed to help parents remain in the workforce.
According to the complaint, the disputed funding was already approved through congressional appropriations and administered through federal agencies responsible for supporting childcare access and family stability. By withholding the money, the administration is accused of overstepping executive authority and effectively rewriting federal spending decisions made by Congress.
The Legal Argument: Executive Authority vs. Congressional Power
At the core of the lawsuit is a constitutional dispute over separation of powers. The states argue that the executive branch does not have unilateral authority to block funding that has been lawfully enacted by Congress. They assert that the freeze amounts to an unlawful impoundment of funds, a practice restricted under federal budget law.
State officials warn that the financial uncertainty has already disrupted childcare providers, many of whom rely on federal support to remain operational. Without timely funding, states say programs could be forced to reduce services, raise costs for families, or shut down entirely—placing additional strain on parents who depend on affordable childcare to maintain employment.
The lawsuit also emphasizes the disproportionate impact on low-income families, rural communities, and households led by single parents. State attorneys general argue that delays in funding could reverse years of progress in expanding childcare access and workforce participation.
Broader Policy Implications and Economic Impact
Beyond the legal claims, the states frame the funding freeze as an economic issue with nationwide consequences. Childcare shortages, they argue, directly affect labor force participation and productivity, particularly among women. By interrupting federal support, the administration’s action risks compounding workforce shortages and increasing financial pressure on families already facing rising living costs.
The Trump administration has defended the freeze as part of a broader review of federal spending priorities, though critics argue the action selectively targets social programs without congressional approval. The states are seeking a court order to compel the release of the funds and prevent similar actions in the future.
If successful, the lawsuit could set an important precedent limiting executive authority over congressionally approved spending. The case is expected to move quickly, given the scale of the funding involved and the immediate impact on state-run programs.