H.R. 7721: Combating Regulatory Abuse, Closing Known Deficiencies, and Overseeing Waste Nationwide Act

This bill, known as the Combating Regulatory Abuse, Closing Known Deficiencies, and Overseeing Waste Nationwide Act or the CRACKDOWN Act of 2026, aims to amend the existing Child Care and Development Block Grant Act of 1990. The key elements of the bill include:

Overpayment Threshold

The bill establishes a new threshold for overpayments made by states under the Child Care and Development Block Grant program:

• If a state has an overpayment rate exceeding 5% of the total payments made in a fiscal year, it will be required to submit a corrective action plan to the Secretary of the appropriate department.
• This corrective action plan must aim to reduce the overpayment rate to 5% or lower in subsequent fiscal years.

Reporting Requirements

States must also provide reports to show compliance with the approved corrective action plan as mandated by the Secretary.

Conditional Ineligibility for Funding

The bill includes provisions for conditional ineligibility for federal funds:

• If a state maintains an overpayment rate above 5% for two consecutive fiscal years, it will become temporarily ineligible to receive federal funds under this program.
• To regain eligibility, the state must either:
• Reduce the overpayment rate to 5% or less for the following fiscal year, or
• Demonstrate significant progress towards complying with the corrective action plan.

The goal of these provisions is to enhance accountability and ensure that federal funds allocated for child care are used efficiently and effectively, reducing the incidence of improper payments by states.

Relevant Companies

None found.