Federal Updates: Funding Freeze Notice and California’s Response

Update (January 11, 2026): Attorney General Bonta secured an emergency order through the court system, unfreezing federal funds for childcare programs. 

Update (January 9, 2026): A federal judge ruled Friday (January 9, 2026) that federal money for child care subsidies cannot be blocked. 

Update (January 9, 2026): CalHHS Secretary Kim Johnson Issues Statement on Trump Administration's Freezing of Critical Federal Funds:

The Trump administration has taken another unprecedented, politically motivated, cruel and harmful step in assaulting Californians in need. Freezing critical funding streams for child care, family assistance programs, and essential services that Californians depend on every single day is a direct threat to our economic stability and social fabric. For families, these programs represent more than assistance. They are pathways to stability and opportunity. They allow parents to pursue education and employment. Family assistance programs provide the basic necessities that keep children fed, housed, and safe. When we withdraw this support, we don't just harm families today. We condemn another generation to the cycles of poverty we have worked so hard to disrupt. The Trump administration's actions undermine years of historic state investment, progress, and research showing that early intervention and family stability are the most effective tools we have to ensure children can rise above the circumstances of their birth.

And make no mistake, these funding streams are foundational to critical infrastructure. They enable parents to work, businesses to maintain their workforce, and our state’s economy to function. The programs targeted by this freeze are not partisan issues, they are human issues. They reflect our shared values of opportunity, dignity, and compassion. California will continue to fight for the resources our families, older adults, and people living with disabilities need to thrive and advance. California holds itself to the highest standards of accountability and program integrity. We investigate and prosecute fraud to protect taxpayer dollars and ensure these critical programs serve the people they are intended to help. California will not allow these attacks to dismantle programs that are responsibly managed and successfully disrupting poverty across our state. California is taking action; by joining other impacted states in filing a lawsuit and seeking immediate relief from the Trump Administration for its unlawful freeze of federal funding for child care and family assistance programs.

Original Blog Posting
On January 6, 2026, the Administration for Children and Families (ACF) at the U.S. Department of Health and Human Services issued a letter to Governor Gavin Newsom regarding temporary drawdown restrictions on California’s Child Care and Development Fund (CCDF).

The letter states that California’s access to federal CCDF funds will be placed under a temporary restricted drawdown while ACF conducts a fiscal and program compliance review. As part of this process, the state is being asked to provide additional documentation related to child care attendance and service delivery.

The restricted drawdown will remain in place during the review period and while California implements the required fiscal oversight measures. To read the full letter, click here.

California’s Initial Response
The California Department of Social Services (CDSS) has confirmed receipt of the federal letter. Deputy Director Lupe Jaime-Mileham shared the following statement:

“The California Department of Social Services (CDSS) administers child care and other essential programs that allow working families to afford safe, reliable care so parents can go to work, support their families, and contribute to their communities. These funds are not optional — they are critical lifelines for working families across California. The State of California aggressively investigates and prosecutes fraud. Yesterday, the CDSS received the attached letters from the federal government. At this time, we are evaluating the letters to determine how our programs may be impacted and may communicate further information.”

We recognize that this update may raise concerns among child care providers and the families we support. While this federal notice outlines an oversight process, it does not reflect on the integrity or value of providers, who remain trusted and essential partners in California’s early care and education system.

State leaders and child care advocates are actively reviewing the situation, and we expect to provide more detailed, practical guidance in the days ahead.

Stay Informed and Supported
In this evolving situation, we encourage all providers and stakeholders to:
    •    Stay connected to trusted sources for verified updates
    •    Take care of yourselves and one another
    •    Know that your role in this system remains vital

You are not alone in this. Your voice, your service, and your stability matter, now more than ever. EveryChild California remains committed to ensuring that this process does not interrupt the essential care families rely on.

We will continue updating this post as more information becomes available.
In partnership, 

Nina Buthee and Alicia Hatfield