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Proposed 'Stop Child Care Scams' bill draws bipartisan concern over enforcement burden and program supply
Summary
Representative Owens testified for H.R.7726 to crack down on child‑care fraud schemes; supporters said stronger oversight would return funds to families, while critics worried the bill adds administrative burdens, could threaten small providers and create unfunded mandates for states.
Representative Robert Owens, sponsor of the Stop Child Care Scams Act (H.R.7726), told the Rules Committee the measure targets recent cases in which child care assistance dollars were diverted from families to fraudulent operators. Owens described a package of reforms — differentiating fraud from payment errors, establishing thresholds for improper payments, increasing state audits and enforcing debarment where appropriate — and framed the bills as protecting taxpayer dollars and the families relying on assistance.
"Protecting the integrity of child care funding is essential," Owens said, urging measures to detect and punish bad actors and to preserve trust in the system.
Republican and Democratic members expressed support for addressing abuse, but they disagreed on how. Representative Burgess, Representative Scott and others said the program needs stronger integrity and cited state investigative reports (including Minnesota) showing improper claims and empty facilities paid on enrollment sheets. Ranking Member Bobby Scott and other Democrats supported the goal of preventing fraud but warned H.R.7726 as drafted could impose burdensome reporting, impose permanent debarment without flexibility, and remove state discretion — potentially reducing supply by penalizing small, marginal providers serving rural communities.
Representative Scott called the bill an "unfunded mandate" that could divert dollars from families to administrative compliance, and asked whether the Office of Child Care could implement the requirements given recent staffing losses. Owens answered that states and the Department must be empowered and resourced to pursue fraudulent operators and to codify effective detection measures.
On student aid fraud, Representative Owens also introduced H.R.7892 (No Aid for Ghost Students Act), which would require tighter identity verification and new pre‑disbursement checks for suspicious FAFSA submissions. Witnesses described "ghost student" schemes in which fabricated or stolen identities are used to obtain Pell grants and loans that the fraudsters then pocket; proponents said codifying identity‑validation safeguards would prevent millions in theft, while critics cautioned that the Department of Education's new systems are still being piloted and codification could lock in immature tools or create collateral harms to legitimate applicants.
Committee members asked for narrower drafting, more funding for oversight, and clearer standards to avoid punitive, overly broad enforcement that could harm honest providers and students.
Next steps: The Rules Committee considered H.R.7726 in the package of measures and debated rule amendments and related votes as it prepared to report a rule providing for floor consideration.
