What to know about the threats on federal funds flowing to Minnesota

It’s not just about sending federal law enforcement officers into Minnesota.

President Donald Trump’s administration is also lashing out at the state by threatening to withhold billions in federal money, much of it intended to help low-income families with food aid, health care and child care — and with a new lawsuit against the state.

Trump’s administration has struck out at Democratic-run states broadly, but it’s made a prime example of Minnesota, where the president last month called the state’s Somali population “garbage,” targeting it with actions not seen elsewhere.

The administration has not spelled out its exact plans in most cases, and it’s not clear if some of the money will actually stop flowing — or, if so, when.

Trump’s administration has unleashed a wave of threats to halt the flow of some federal funds to other states, too — including federal funds to “sanctuary cities” that limit cooperation with federal immigration officials and their states.

Minnesota has been singled out in some cuts as Trump repeatedly criticizes Gov. Tim Walz over fraud in federal programs. Walz, the 2024 Democratic vice presidential nominee and a high-profile Trump critic, ended his campaign this month for a third term, saying he couldn’t run a campaign while fending off the attacks and running the state.

Minnesota is pushing back in courts or otherwise.

Here’s a look at the planned freezes in Minnesota.

Agriculture Department grants suspended

The Agriculture Department said it’s freezing funding in the state and its largest city, Minneapolis — but without laying out many details. Agriculture Secretary Brooke Rollins said in a social media post Jan. 9 announcing the action: “No more handouts to thieves!”

In a letter to Walz and Minneapolis Mayor Jacob Frey, she cited a major fraud case involving a USDA-funded pandemic relief program that broke in 2022 in which 78 people have been charged — and 57 convicted.

Rollins said she was suspending all current and future awards to the city and state and told them to provide payment justifications for all transactions since Jan. 20, 2025, the day Trump returned to office. The justifications would be required to receive future money, too.

Rollins said the awards at risk total more than $129 million but did not specify which programs are included. Her department has not clarified whether the amount includes payments that go to individuals, or just those to government entities.

Based on the figure from Rollins, the freeze would not appear to include funds for the Supplemental Nutrition Assistance Program, which helps about 1 in 12 Minnesota residents buy groceries. Minnesota residents received more than $850 million through that program in 2024. Still, a Minnesota Department of Children, Youth and Families website says the department is analyzing any impacts to SNAP.

It also appears the National School Lunch Program, which provides and subsidizes school meals, is not included. Minnesota was expected to receive more than $240 million in that program in the budget year that ended Sept. 30.

The Agriculture Department also runs programs aimed at food producers, including disaster aid and price supports.

Minnesota Agriculture Commissioner Thom Peterson said at a news conference Wednesday that it’s not clear exactly which programs might lose funding, but the state has started receiving notices from some pauses, including to a poultry testing lab. He said that leaves uncertainty about who would pay if avian influenza is found at a farm and birds must be removed.

Minnesota appeals reduction in Medicaid payments

The Centers for Medicare and Medicaid Services also told Minnesota last week that it intends to withhold $515 million every three months from 14 Medicaid programs that were deemed high risk after rejecting a corrective action plan the federal government demanded because of fraud allegations.

The programs identified as high risk include adult companion services, residential treatment services and nonemergency medical transportation.

The amount to be withheld is equivalent to one-fourth of the federal money for those programs.

On a call with reporters Tuesday, state Department of Human Services said they were mounting an administrative appeal to the freeze.

They said the department has been emphasizing anti-fraud measures for more than a year and questioned the federal action, which they said is unlike anything they’ve found in other states.

“Minnesota cannot absorb the loss of more than $2 billion in annual funding for these programs without catastrophic consequences for the people we serve,” Temporary Human Services Commissioner Shireen Gandhi said, adding that the state can’t find other examples of similar federal decisions.

“It’s not corrective action,” she said. “It’s a punitive action.”

Court pauses freeze on child care and other social services money

The U.S. Department of Health and Human Services told Minnesota in late December that it was freezing funds in the child Care and Development Block Grant, which subsidizes child care for low-income families, telling the state that it had to submit attendance records and other information before the money would flow again.

Last week, the Trump administration said it was halting payments of the child care money, along with temporary aid for Temporary Assistance for Needy Families, which provides job training and cash assistance, and the Social Services Block Grant, which funds a variety of social services, for Minnesota and four other states where Democrats lead the government.

The five states — along with Minnesota, California, Colorado, Illinois and New York — sued. Advocates and officials warned that stopping the childcare subsidy would put many daycare providers at risk of layoffs of closures. And those could put the families of all their clients in binds, not just those who rely on the subsidies.

Last week, a federal judge ruled that the administration cannot block the money for now.

Federal government launches lawsuit over government hiring practices

The federal administration on Wednesday unleashed another line of attack on the Minnesota state government.

The U.S. Department of Justice sued the state government in federal court over its affirmative action hiring requirements. The lawsuit seeks to end programs intended to diversify the government workforce, claiming “Minnesota requires its hiring managers to jump through additional hoops to hire employees with disfavored skin colors or sex chromosomes.”

The lawsuit also seeks money for employees and prospective employees who were impacted.

The state attorney general’s office said it would respond in court.