H.R. 7723, Safeguarding Taxpayer Dollars in Child Care Act of 2026

Bill Summary

H.R. 7723 would require the Secretary of the Department of Health and Human Services to permanently ban providers that commit fraud against the Child Care and Development Block Grant (CCDBG), Child Care Entitlement to States (CCES) programs, or the Child and Adult Care Food Program (CACFP) from participating in any of those programs.

Estimated Federal Cost

The costs of the legislation fall within budget function 600 (income security).

Basis of Estimate

CBO assumes that the bill will be enacted in fiscal year 2026.

Direct Spending

H.R. 7723 would permanently ban certain providers from participating in CACFP and CCES following a final determination of fraud. Both programs are classified in the federal budget as direct spending.

CACFP provides reimbursements for meals served at childcare centers, family day care homes, adult day care centers, afterschool care programs, and emergency shelters. Spending for the program is not capped in statute and totaled $4.3 billion in 2025. Under current law, CACFP providers that are terminated for fraud are disqualified from participating in CACFP for at least seven years or longer if they do not repay their outstanding debt. CBO expects that, under current law, few providers reenter the program after being terminated for fraud and that a permanent ban under the bill would have a small effect on the number of meals served. Consequently, CBO estimates that enacting H.R. 7723 would reduce direct spending by less than $500,000 over the 2026‑2036 period.

CCES provides funding to states to subsidize the cost of childcare for low-income working families. The program is authorized under section 418 of the Social Security Act, which permanently provides $3.6 billion annually for the program. States spend all of that funding, typically by providing households with vouchers that can be used with qualified childcare providers. Although enacting the bill could affect which providers receive funding, CBO expects that states would still spend the full amount provided because households would use other qualified providers. Consequently, CBO estimates that enacting H.R. 7723 would not affect total spending in CCES over the 2026-2036 period.

Spending Subject to Appropriation

H.R. 7723 also would permanently ban certain providers from participating in CCDBG following a final determination of fraud. CCDBG provides funding to states, the District of Columbia, U.S. territories, and tribes to subsidize and improve the quality of childcare for low-income families. Typically, those entities provide vouchers to households, which use them to engage qualified childcare providers. The underlying authorization for CCDBG expired in 2020, but lawmakers have continued to provide funding for the program. In 2026, the program received an appropriation of $8.8 billion. In this estimate, CBO estimates only the cost of implementing the new activities specified in the bill and not the cost of reauthorizing CCDBG.

Although permanently banning providers from CCDBG would affect which providers receive funding, CBO expects that it would not affect total spending for the program because households would use other qualified providers. Thus, CBO estimates that implementing H.R. 7723 would not affect spending for CCDBG over the 2026-2036 period.

Based on the cost of similar activities, CBO estimates that the cost to the Department of Health and Human Services to ban providers would be $2 million over the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. CBO estimates that enacting the bill would decrease direct spending by less than $500,000 over the 2026‑2036 period.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 7723 would not increase direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2037.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Estimate Prepared By

Federal Costs:
Jada Ho (for the Child Care Development Block Grant)
Susanne Mehlman (for Child Care Entitlement to States)
Maggie Applebaum Rufe (for the Child and Adult Care Food Program)

Mandates: Andrew Laughlin

Estimate Reviewed By

Elizabeth Cove Delisle
Chief, Finance, Income Security Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

Christi Hawley Anthony
Deputy Director of Budget Analysis

Estimate Approved By