U.S. Senators Ted Cruz (R-Texas), Mike Lee (R-Utah), and Rick Scott (R-Fla.) have introduced the Payment Integrity Act, a bill aimed at reducing fraud in childcare programs funded by federal dollars. The legislation seeks to address issues arising from payments made based on enrollment numbers or in advance of services being provided.
The proposed law would require states to pay childcare providers only after verifying actual child attendance. It also clarifies that lead agencies may issue payments following the delivery of childcare services, rather than before.
Senator Cruz stated, “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. 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.”
Senator Lee added, “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. This is the due diligence that should have been implemented all along.”
Senator Scott said, “I’m proud to join Senator Ted Cruz in cosponsoring the Payment Integrity Act to restore common sense and accountability to our child care system after we’ve seen astounding reports of fraud and abuse. Hardworking American taxpayer dollars should only go toward services that are actually provided, not thrown carelessly without checking. This bill ensures the federal government is held accountable as stewards of tax dollars and reduces fraud and waste, so we can safeguard the critical resources for the families who truly depend on this support.”
In Minnesota, out of 118,831 eligible children aged five or under for Child Care Development Block Grant (CCDBG) assistance in 2025, only about 10% received support. Authorities found that individuals stole more than $9 billion from taxpayers through fraudulent claims intended for child care assistance.
On January 5th, Health and Human Services proposed a rule change intended to reverse a previous regulation from the Biden administration which had reduced oversight over federally funded child care programs. The Payment Integrity Act aims to codify these changes by reinstating requirements for attendance-based billing rather than advance payments.
Earlier this month, Senator Cruz led a Senate hearing examining widespread fraud within Minnesota’s childcare programs as Chairman of the U.S. Senate Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights.
Ted Cruz has won multiple elections during his political career; most recently he defeated Colin Allred in 2024 with just over 53% of votes.
