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 to require states with improper payment rates above 5% to submit a corrective action plan to the Department of Health and Human Services. If a state's improper payment rate stays above 5% for two consecutive years, the state would become ineligible for program funds unless it demonstrates it will reduce the rate or make significant progress toward its corrective action plan.
Who benefits
Taxpayers and federal oversight bodies benefiting from reduced improper payments; families relying on well-administered child care subsidies who could see improved program integrity over time; HHS gains a clearer enforcement tool for holding states accountable.
Who is hurt
State child care agencies facing new administrative burdens to track and correct improper payments; low-income families in states that fail to meet the threshold, who could lose access to subsidized child care if federal funds are withheld; state budgets that may need additional resources for compliance systems and reporting.
Supporters argue
Supporters argue that improper payments in the Child Care and Development Block Grant program have been a persistent problem flagged by federal auditors, and that a clear 5% threshold with corrective action requirements creates accountability without eliminating funding outright for a single lapse. They contend the two-year grace period before ineligibility, plus the option to show progress on a corrective plan, balances fiscal responsibility with continued support for families.
Opponents argue
Opponents argue that cutting off funding to states with persistent improper payment rates could ultimately harm the low-income families the program serves, since administrative errors like documentation mistakes are often counted as "improper payments" even when no fraud occurred. They contend that underfunded state agencies may struggle to meet the threshold not due to mismanagement but due to insufficient staffing, and that withholding funds punishes families for state-level administrative shortfalls beyond their control.
Constitutional context
This bill falls under Congress's spending power (Article I, Section 8) to attach conditions to federal grants to states, an authority the Supreme Court addressed in South Dakota v. Dole (1987), which allows conditions on federal funds as long as they are not unduly coercive.
Checks and balances
Congress sets the statutory threshold and consequences; HHS (executive branch) gains authority to approve corrective action plans and determine state compliance, with limited judicial review available to states disputing funding termination.
Historical precedent
Similar improper payment thresholds and corrective action requirements exist in other federal-state block grant programs, such as those imposed under the Improper Payments Elimination and Recovery Act framework applied across federal agencies.