Court Blocks Trump-Vance Admin's Unlawful Child Care Funding Freeze

The Facts -

Federal Court Intervenes: Key Funding for Child Care and Families Restored

San Francisco — A federal court has taken decisive action to restore over $10 billion in child care and family assistance funding that had been frozen by the Trump-Vance administration. The preliminary injunction was issued in the ongoing case of AFSCME v. U.S. Department of Health and Human Services et al., and it aims to reinstate crucial financial support to working families, child care providers, and small businesses across the nation.

The ruling halts actions by the administration that were affecting programs in California, Colorado, Illinois, Minnesota, and New York. This decision is pivotal in ensuring that essential funds, which assist families in accessing secure and affordable child care, continue to benefit local economies.

Over recent months, the Trump-Vance administration had regularly highlighted the termination of federal grants to “blue states" as a retaliatory measure. Allegations of “fraud” in five Democratic-led states were used as grounds to target these regions, though specifics were often vague and unsubstantiated.

The lawsuit was initiated by various unions and small business organizations, including the American Federation of State, County and Municipal Employees (AFSCME), Service Employees International Union (SEIU), Main Street Alliance, and AFSCME affiliates such as United Domestic Workers of America (UDW) and AFSCME Councils 31 and 57. The plaintiffs are legally represented by Democracy Forward and the law firm Beeson, Tayer & Bodoine.

According to AFSCME President Lee Saunders, “The court’s decision to block the administration’s illegal funding freeze is a major victory for providers, families and the children they serve.” He emphasized that AFSCME members could now return their focus to supporting children’s learning and development without the looming threat of service cuts. Saunders added, “We’ll continue to fight the administration’s attempts to slash services for working families to pay for more tax cuts for its billionaire backers.”

Wendy Bobadilla, a family child care provider from Palmdale, California, and member of Child Care Providers United and SEIU Local 99, shared the relief experienced following the court's decision. Bobadilla highlighted the importance of child care for families in her community, stating that it is often the determining factor in whether parents can provide for their families.

Richard Trent, Executive Director of Main Street Alliance, underscored the non-partisan necessity of child care, calling it “essential infrastructure for small businesses and working families.” Trent voiced approval over the court’s decision, which prevented the eviction of parents from the workforce and supported employers who rely on these workers.

Skye Perryman, President and CEO of Democracy Forward, commented on the litigation, saying, “Once again, we took the Trump-Vance administration to court for trying to play politics with the lives of working families – and won.” She criticized the administration's attempt to block funds approved by Congress, thus threatening child care facilities and destabilizing local economies.

The suit contests the legality of the administration's funding freeze, enacted on January 6, 2026, arguing it violated the Administrative Procedure Act and the First Amendment. The plaintiffs assert that the freeze was enacted without necessary legal processes, was unlawfully authorized, and was politically motivated against specific states.

The legal team from Democracy Forward includes Yenisey Rodríguez, Kevin E. Friedl, Shiva Kooragayala, Cortney Robinson Henderson, Joel McElvain, and Robin F. Thurston.

Read the complaint here.

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