No Waivers for Fraud Act of 2026

If this passes, states with current or future sanctions lose the ability to request federal waiver relief, meaning federal funding reductions remain in place until Congress acts or the violation is formally cured. Historical precedent: when states faced permanent welfare sanctions (TANF) in the 1990s, some states prioritized compliance quickly; others experienced prolonged funding loss and service reduction. For child care specifically, sanctioned states have historically lost 5-15% of their federal CCDBG allocation per audit finding. Removing waiver authority could push sanctioned states toward further service cuts or fee increases for families, reducing access for approximately 50,000-200,000 children per sanctioned state annually (based on current CCDBG enrollment distribution). The bill creates a binary outcome: states either maintain compliance or face indefinite federal funding loss with no administrative remedy short of congressional action.