Biden-Era Child Care Payment Rule Rescinded

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A new policy threatens responsible oversight of child care funds, sparking a wave of accountability from the Trump administration.

Story Highlights

HHS rescinds a Biden-era policy allowing pre-payment to child care centers without attendance verification.
Fraudulent practices in Minnesota were spotlighted by a viral video, leading to federal action.
The policy rollback aims to curb fraud and restore fiscal accountability to taxpayer funds.
Conservative influencers play a key role in highlighting government inefficiencies.

HHS Rescinds Flawed Child Care Payment Rule

On January 5, 2026, the U.S. Department of Health and Human Services (HHS) announced the rescission of a Biden-era rule under the Child Care and Development Fund (CCDF) program. This 2024 rule required states to pay child care providers based on enrollment rather than actual attendance, creating opportunities for fraud as funds were disbursed before services were verified. The rollback restores attendance-based billing, ensuring that payments are made post-service and allowing states the flexibility to use parent-directed vouchers.

The decision was prompted in part by a viral video from conservative influencer Nick Shirley, which exposed empty daycares in Minnesota that were still receiving federal funds. The video, viewed millions of times, heightened concerns about the misuse of taxpayer money and led to the HHS freezing payments to the state pending audits. These actions reflect a broader push by the Trump administration to protect taxpayer dollars and ensure funds support legitimate child care operations.

Trump’s HHS rescinds Biden rule that gave child care centers funding without verifying attendance https://t.co/8DomLXkaCp pic.twitter.com/P8E0GI0S0a

— New York Post (@nypost) January 5, 2026

Impacts of the Rule Change

The rescission of the Biden-era rule has significant implications for families and providers. In the short term, payment delays may strain both providers and families; however, the long-term benefits include a reduction in fraudulent activities and the restoration of fiscal controls. This policy change is expected to lower improper payments while encouraging the closure of illegitimate providers.

Low-income working families, including the 23,000 children in Minnesota’s Child Care Assistance Program, face potential access disruptions as providers adjust to the new requirements. However, the move is seen as a necessary step to ensure that federal funds reach those genuinely in need, supporting workforce participation and safeguarding the integrity of child care services.

The Biden administration didn’t require verification that kids were attending child care centers before sending them as much as $19 billion in federal funding. Today HHS announced we are reversing that Biden-era practice and restoring “attendance-based billing.” pic.twitter.com/o9HbQCFIoF

— HHS Rapid Response (@HHSResponse) January 5, 2026

Federal and State Tensions Rise

The rescission has sparked tension between federal and state agencies. While HHS officials emphasize the need for stringent verification to combat fraud, Minnesota state officials have disputed the methods used in the viral video, noting that state visits found children present at the centers. Yet, the federal response remains firm, with enhanced oversight measures, including a national fraud tip line and stricter verification processes.

These developments underscore the Trump administration’s commitment to counteracting the policy loopholes that have been exploited in recent years. By prioritizing accountability and transparency, the administration aims to reinforce trust in government programs and ensure that taxpayer dollars are used effectively.