Connect with us

Hi, what are you looking for?

Economy

Cruz targets Minnesota-style fraud with bill forcing proof before federal childcare payouts

: A trio of Republican senators are moving to overhaul how federal childcare funds are distributed after what they call ‘mass fraud’ in Minnesota exposed a system that paid providers before verifying children were ever in the room.

Sen. Ted Cruz, R-Texas, joined by Sens. Mike Lee, R-Utah, and Rick Scott, R-Fla., is introducing the Payment Integrity Act, legislation that would require states to distribute federally funded childcare dollars based on verified attendance — not enrollment claims.

‘Programs in Minnesota for welfare and childcare were designed to channel resources into protecting vulnerable children, but were treated like an open ATM by criminals,’ Cruz told Fox News Digital.

‘The mass fraud in Minnesota shows that American taxpayers can no longer rely on local and state politicians to prevent abuses, because those politicians often have electoral and partisan incentives to look the other way. My legislation reduces the risk of the waste and fraud we’ve seen and ensures that resources are provided to children and families who need it.’

The bill would reverse a 2024 Biden administration rule requiring states to pay childcare providers before attendance verification. Under Cruz’s proposal, providers would be paid only after services are confirmed — shifting from enrollment-based payments to attendance-based billing.

Cruz’s bill comes as the outspoken Texan led a Senate Judiciary Subcommittee hearing on alleged Somali fraudsters last week. There, lawmakers heard directly from David Hoch — a journalist seen accompanying blogger Nick Shirley to addresses proclaimed to be Somali daycares.

‘There are few crimes more morally repugnant than stealing from vulnerable children. Every dollar stolen is a meal not eaten, a doctor’s visit missed, and a future diminished,’ Cruz said, adding that such fraud ‘plunders our children’s potential.’

Gesturing towards a photo of the ‘Quality Learing Center’ in Minneapolis during the hearing, an allegedly fraudulent childcare provider Cruz called ’emblematic’ of the crisis, he said the fraud was occurring not in ‘some distant or lawless place, but in the heart of America’s Midwest.’

Co-sponsor Lee said that support for childcare should ‘go to real kids, not empty rooms.’

‘Fake childcare operations are stealing funding from the ones who are actually taking care of America’s children in need. Our bill will address this massive fraud by granting funding based on actual attendance rather than reported enrollment, and allowing states to pay retroactively instead of in advance,’ Lee said, adding such ‘diligence’ should have been the law all along.

The Payment Integrity Act also puts into law January rule from Health and Human Services that established attendance-based billing procedures

That rule, according to Secretary Robert F. Kennedy’s deputy Jim O’Neill was also spurred on by what has been happening in Minnesota.

‘We’ve seen credible and widespread allegations of fraudulent daycare providers who were not caring for children at all. The reforms we are enacting will make fraud harder to perpetrate,’ O’Neill said in a statement.

The Payment Integrity Act officially amends the Child Care and Development Block Grant Act signed into law by President George Herbert Walker Bush, to include such ‘attendance-based billing.’

‘Nothing in this subchapter shall be construed to require a lead agency to make a payment to a child care provider prior to the provision of child care services,’ the bill reads, a direct reversal of the pre-payment system Cruz says allowed fraud to flourish.

This post appeared first on FOX NEWS

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.






    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Economy

    Top House Republicans are leading a bill to reverse the Biden administration’s decision to lift sanctions on a Chinese entity linked to the persecution...

    Editor's Pick

    The rise of Asian fast fashion retailer Shein already has Amazon on alert, but its plans of selling proprietary supply-chain technology and services to...

    Economy

    Minnesota Gov. Tim Walz is facing scrutiny from Republicans over what they say are pro-China remarks, including an interview in which the Democratic vice...

    Economy

    Ahead of a planned trip to China this week, U.S. Secretary of State Antony Blinken is reported to have alleged that Beijing is still...

    Disclaimer: Smartmerchantknow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2026 smartmerchantknow.com