CRACKDOWN Act of 2026

This bill amends the Child Care and Development Block Grant Act to set a 5% overpayment threshold for states. If a state exceeds this rate (payments made in error exceeding 5% of total child care funds), it must submit a corrective action plan to reduce the rate. After two consecutive years above 5%, the state loses eligibility for child care funds unless it demonstrates progress toward reducing overpayments or shows a plan to meet the 5% target. The policy directly affects states administering child care subsidies, requiring them to address payment errors or risk losing federal funding.