HR-7721-119
Placed on the Union Calendar, Calendar No. 507.
Sponsored by Glenn Grothman (R-WI)
What it does
This bill would amend the Child Care and Development Block Grant Act of 1990 to establish a 5% improper payment rate threshold for states receiving federal child care funds. States exceeding that threshold in a given fiscal year would be required to submit a corrective action plan to the Secretary of Health and Human Services. States that exceed the 5% threshold for two consecutive fiscal years would become conditionally ineligible for further funding unless they demonstrate they will reduce the improper payment rate or make significant progress on their corrective action plan.
Who benefits
Federal taxpayers broadly, who would see reduced waste in a federally funded program. States that already maintain low improper payment rates, who would face no new requirements. Children and families who are the intended beneficiaries of child care funds, as more accurate payments could mean funds reach eligible recipients more reliably. Federal oversight officials who would gain a clearer enforcement mechanism.
Who is hurt
States with currently high improper payment rates — which may include states with complex eligibility systems or under-resourced administrative infrastructure — who could face funding loss. Low-income working families in those states who depend on child care subsidies and could lose access if their state becomes ineligible. Child care providers in high-error states who rely on subsidy payments. State administrators who would bear the cost of developing, implementing, and reporting on corrective action plans.
Supporters argue
Supporters argue that the federal government has long documented significant improper payment problems in the Child Care and Development Fund, with the Government Accountability Office and HHS Inspector General repeatedly flagging the program as high-risk. They contend that without enforceable thresholds, states face no meaningful consequence for persistent payment errors, and that a 5% threshold is a reasonable standard that still allows for administrative complexity while protecting taxpayer funds from waste, fraud, and abuse.
Opponents argue
Opponents argue that withholding child care funding from states with high error rates punishes low-income children and families for administrative shortcomings that are often caused by underfunded state agencies, not intentional fraud. They contend that "improper payments" frequently include technical paperwork errors rather than fraudulent disbursements, and that cutting off funds could destabilize child care markets in affected states, reducing access for the working families the program is designed to serve.