House Bill to Make Blocking Federal Funds Easier Would Take Away Help People Need to Afford Rising Cost of Basics

Ensuring that federal funding reaches eligible recipients, while preventing and addressing factual instances of fraud, is a critical part of good governance that has typically garnered bipartisan support.

Unfortunately, the Trump Administration is making it harder for eligible recipients to access basic needs programs and is complicating legitimate efforts to help ensure payments go to the right people. Many of the Administration’s actions, instead of focusing on fraud, threaten to take away the help people need to afford essentials, like putting food on the table, seeing a doctor, or obtaining child care.

For example, just last week, the Administration suspended $1.3 billion in Medicaid payments to California, citing unsubstantiated concerns about fraud in the state’s home care program. California officials suggested the move could harm almost 1 million elderly and disabled people who use the program to receive care in their homes.

It is in this light that Congress must evaluate legislation recently reported by the House Oversight Committee, HR 8464 (known as the Stopping Fraudulent Payments Act).

This legislation creates a new, broad, and subjective authority allowing federal agencies or the Secretary of the Treasury to block federal payments to individuals, nonprofit organizations, communities, and states. While the bill suggests this authority is narrowly related to preventing fraud, its language is broad and vague enough for this, or any other, administration to stop, delay, or condition payments for programs it opposes, or in states that it disfavors, using claims of misspending as a pretext to take away or hold up funding.

Indeed, the Trump Administration has already attempted or threatened to block federal funds that help people afford health care, food, child care, and other basic needs, claiming concerns about fraud, but often without providing evidence or misstating the facts.

HR 8464 Allows Considerable Discretion for Federal Agencies to Block Payments

HR 8464 would require federal agencies administering public assistance or benefit programs to “delay, condition or segment” federal payments if they have “sufficient reason to determine” the payment presents an “elevated” risk of fraud, or if the agency is directed by the Secretary of the Treasury to take such action based on the same criteria. This framework, which provides permanent authority for the current and any future administration, leaves considerable discretion to federal agencies and the Treasury Secretary to determine which payments to withhold.

For example, the Secretary of Health and Human Services could attempt to temporarily block federal Medicaid payments for particular services in certain states citing a rise in spending for that service, or a higher level than in other states, as “sufficient reason” to believe there is fraud, even if such spending was driven by changes in policy or circumstances. (The bill stipulates that an “increase in the volume of a payment amount” can be considered a “fraud risk indicator.”) In fact, the Trump Administration has already suggested that increased Medicaid spending on home care services, such as helping older adults and people with disabilities with bathing, dressing, and eating, may be related to fraud when this broader trend actually reflects policy choices to prioritize home care over institutional care.

The legislation links its proposed authority to block payments to a current-law process for certifying the disbursement of federal funds, which are then provided through payment systems administered by the Treasury Department’s Bureau of the Fiscal Service. This process applies to nearly all federal spending, including Medicare payments to health care providers and Social Security and Supplemental Security Income payments to elderly and disabled individuals. HR 8464 includes specific references to federal funds disbursed by a state or local government under “a State-administered and federally-funded program,” presumably referring to Medicaid, SNAP, and other programs that states primarily administer while receiving federal funds for at least a portion of the program’s cost.

The bill outlines that any actions taken under this authority are to be temporary, but it also provides some discretion to agency heads in determining corrective compliance. And the bill provides liability protection for any federal officer blocking federal payments under this new authority, making it that much harder to hold any official responsible for abusing their authority.

HR 8464 Would Further Enable Trump Administration to Block Critical Funding

The Trump Administration has already attempted to block federal funds for a variety of critical programs by making broad and unsubstantiated claims about fraud, citing inaccurate findings, or departing from statutory processes for addressing such concerns. Leaving the Trump Administration leeway to determine what is a sufficient reason to block federal payments is dangerous given its recent actions.

The courts have stepped in to prevent, at least temporarily, many of the Administration’s most drastic actions to date. But if Congress were to pass legislation that provides explicit, new authority for federal agencies to withhold funds, the Trump Administration could be emboldened to be even more aggressive in attempting to take away funding for programs that help people afford the high cost of basic needs, like food and health care.

For example, in December 2025, the Department of Agriculture sent letters to Colorado and Minnesota threatening federal financial sanctions unless they immediately reevaluated the eligibility for all households receiving SNAP in certain counties – an increase in red tape and confusion that would likely have taken away food assistance from many eligible individuals. The courts blocked USDA from moving forward on this illegal demand, citing the agency’s “sweeping, nonspecific, and unsupported accusations” and the harm to eligible families the recertifications might cause.

In January, the Department of Health and Human Services (HHS) took the unprecedented step of freezing roughly $10 billion in funding for families’ child care, basic cash assistance, and other essential needs in five states led by Democratic governors. This action was illegal, unsupported by evidence (or even specific allegations), and harmful to families with low and moderate incomes. The courts blocked the Administration from proceeding with this freeze until litigation on the issue is concluded.

Also earlier this year, HHS announced two separate actions to hold up hundreds of millions of dollars in Medicaid funding from Minnesota, and shortly thereafter sent pre-enforcement letters to California, Florida, Maine, and New York. The HHS letter to New York justified its probe in part based on an egregious mistake the Trump Administration made when calculating the state’s spending on personal care services under Medicaid.

The federal government should address factual instances of fraud, but that should not mean taking away vital benefits from eligible individuals. Unfortunately, HR 8464 would further enable and encourage the Administration to block vital assistance and services that people depend on, especially as the cost of food, fuel, housing, and health care continue to rise.