Trump’s HHS just dismantled a Biden-era policy that allowed states to funnel taxpayer money to daycare centers without verifying children actually attended, ending a massive fraud scheme that bilked working families out of millions.
Story Highlights
- HHS rescinded 2024 Biden rules allowing daycare payments based on enrollment rather than verified attendance
- New fraud tip line received over 245 reports in just one week, exposing widespread abuse
- Viral video revealed empty Minnesota daycares still receiving federal payments
- Trump administration restored attendance-based billing and state flexibility for parent-directed vouchers
Biden’s Enrollment Scheme Enabled Massive Fraud
The Department of Health and Human Services announced January 5th the complete elimination of Biden’s 2024 Child Care and Development Fund rules that mandated upfront payments based on enrollment rather than actual service delivery. Secretary Robert F. Kennedy Jr. declared these “loopholes diverted money to bad actors” while legitimate working families suffered. The previous administration’s policy essentially guaranteed payments to providers regardless of whether children showed up, creating an irresistible invitation for fraud that conservatives warned about from the beginning.
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
Conservative Whistleblower Exposes Empty Daycare Scandal
Conservative influencer Nick Shirley’s December 2025 viral video documenting completely empty Minnesota daycares sparked the federal crackdown that exposed this taxpayer theft. His footage showed facility after facility in Somali communities with no children present despite receiving federal funding through the Child Care Assistance Program. Deputy Secretary Jim O’Neill cited this evidence when announcing payment freezes, demanding immediate audits to address what he called “blatant fraud rampant” across the nation.
Minnesota officials initially disputed the timing and methodology of Shirley’s investigation, claiming their own visits found children present. However, federal investigators had already identified problematic patterns, with one facility flagged since 2022. The state’s defensive response highlights the tension between Democratic leadership protecting failed Biden policies and Trump’s commitment to fiscal accountability.
Trump Administration Restores Taxpayer Protections
The new HHS leadership under Trump immediately implemented comprehensive fraud prevention measures including a national tip line that received 245 reports within its first week of operation. Assistant Secretary Alex Adams emphasized the administration’s priority of requiring “proof of services” before releasing any taxpayer funds. This common-sense approach directly contradicts the Biden administration’s reckless spending philosophy that prioritized provider convenience over fiscal responsibility.
The policy reversal restores attendance-based billing, post-service payments, and eliminates the mandatory upfront funding that enabled widespread abuse. States now have flexibility to implement parent-directed voucher systems rather than guaranteed provider contracts, returning control to families rather than bureaucrats. This change protects the approximately $185 million Minnesota receives annually while ensuring funds reach actual childcare services.The 30-day public comment period demonstrates Trump’s commitment to transparency while providing states time to adjust their systems. Enhanced oversight through the new Defend the Spend system ensures ongoing monitoring to prevent future abuse of federal programs designed to help working families achieve economic independence.
https://youtu.be/Mxp6yQCpa5Q?si=UfaCyoMwVdQIdd_3
Sources:
HHS Rescinds Child Care Payment Rules Tied to Enrollment
HHS to Close Biden-Era Loophole That Let States Pay Child Care Providers Without Counting Attendance
HHS Freezing Child Care Payments to Minnesota After Fraud Allegations
HHS Targets Biden-Era Rule That Funds Child Care Centers Before Verifying Attendance
