HR-7723-119
Placed on the Union Calendar, Calendar No. 509.
Sponsored by Virginia Foxx (R-NC)
What it does
This bill would amend two federal laws — the Child Care and Development Block Grant (CCDBG) Act and the Child and Adult Care Food Program (CACFP) — to permanently debar any child care provider found to have committed fraud from receiving federal financial assistance under either program. A "final determination of fraud" is defined as an administrative or judicial ruling, with all appeals exhausted, finding that a provider knowingly submitted false documents, misrepresented enrollment or services, operated without required state licensing, or made improper expenditures. The bill also creates a cross-program link: a provider debarred from one program would be automatically debarred from the other.
Who benefits
Taxpayers broadly, who would have greater assurance that federal child care funds are not diverted through fraud. Legitimate, law-abiding child care providers who compete for funding against fraudulent operators. Low-income families who depend on the CCDBG program for child care subsidies, as fraud diverts resources away from eligible recipients. Federal and state program administrators who would have a clearer legal mandate and tool to remove bad actors. Children enrolled in CACFP who benefit when food program funds reach their intended purpose.
Who is hurt
Child care providers found to have committed fraud who would face permanent — rather than time-limited — exclusion from federal funding, with no path to reinstatement. Providers operating in gray areas of compliance who may face permanent consequences for administrative errors later characterized as fraud. Employees and families served by debarred providers, who could lose access to care if a provider is shut out of funding. Small or minority-owned child care businesses that may have less legal and administrative capacity to navigate appeals processes before a final fraud determination is made.
Supporters argue
Supporters argue that fraud in the CCDBG and CACFP programs has cost taxpayers hundreds of millions of dollars — citing a widely reported Minnesota case in which over $40 million in CACFP funds were fraudulently claimed — and that existing law lacks a permanent debarment mechanism to stop repeat offenders. They contend that because debarment only triggers after all administrative and judicial appeals are exhausted, due process is fully preserved, and permanent exclusion is a proportionate response to deliberate theft of funds meant for vulnerable children.
Opponents argue
Opponents argue that permanent, irrevocable debarment is a disproportionately harsh penalty that eliminates any possibility of rehabilitation or return to compliance, even decades after a single offense. They contend that small providers — disproportionately women- and minority-owned businesses in underserved communities — may lack the legal resources to mount effective appeals, meaning a permanent ban could result from procedural failures rather than genuine culpability. Critics also argue that automatic cross-program debarment compounds the penalty without independent review of the conduct in each program.
Constitutional context
No significant constitutional issue is raised by this bill. Congress has broad authority under the Spending Clause (Art. I, §8) to attach conditions to federal grants, and courts have consistently upheld debarment from federal programs as a permissible condition of receiving public funds rather than a punitive sanction requiring criminal due process protections.
Checks and balances
The Executive Branch (HHS Secretary) gains authority to investigate fraud and impose permanent debarment; checks include the statutory requirement that debarment follow only a final administrative or judicial determination with all appeals exhausted, and providers retain the right to challenge fraud findings in court before debarment takes effect.
Historical precedent
The CACFP already contains debarment provisions for fraud under the Richard B. Russell National School Lunch Act, and federal procurement law (FAR 9.4) has long authorized debarment of contractors for fraud; this bill extends and cross-links those existing mechanisms to the CCDBG program.