"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.”
Texas Insider Report: WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas), Mike Lee (R-Utah), and Rick Scott (R-Fla.) introduced the Payment Integrity Act. The bill counters fraud enabled by payments based on enrollment numbers and/or provided in advance. It requires states to pay childcare providers based on verified child attendance and clarifies that lead agencies may issue payments after childcare services have been delivered.
Sen. Cruz said, “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.”
Sen. Lee said, “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.”
Sen. 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.”
Click here to read the bill.
BACKGROUND:
In Minnesota, 118,831 children ages five and under are eligible for CCDBG assistance, yet only 11,718 of those children—roughly 10%— received this support in 2025. As a result, the individuals exposed in Minnesota who stole upwards of $9 billion from American taxpayers did not merely commit financial fraud—they also diverted limited child care assistance away from families who genuinely need it.
On January 5th, Health and Human Services proposed this rule to rescind a Biden-era rule that reduced oversight and heightened the likelihood of waste, fraud, and abuse in federally funded child care. The Payment Integrity Act would codify the proposed language to restore attendance-based billing and would no longer require that providers be paid in advance.
On February 4th, Sen. Cruz led the first hearing in the Senate on the rampant fraud in Minnesota as Chairman of the U.S. Senate Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights.
