S. 4378 — Protecting American Taxpayers Act

This section revises state plan requirements under the Child Care and Development Block Grant Act of 1990 to require that payments to child care providers be based on recorded attendance rather than enrollment alone, and specifies that such payments must be made as reimbursement after services are provided. It also requires each provider receiving payments to prepare and maintain records of attendance and services for 7 years and to make those records available for audits by the Secretary, the Attorney General, and the Comptroller General.

This section directs the Secretary of Health and Human Services to notify the Inspector General of the Department of Health and Human Services within 60 days after determining that aggregate payments or the number of providers or suppliers for an item or service increased by more than 100 percent in a single year in any zip code and county or county equivalent under Medicare, qualified health plans offered through American Health Benefit Exchanges, Medicaid, or CHIP. This section requires each Exchange to collect and submit to the Secretary the data needed to make such determinations for qualified health plans. This section further requires the Inspector General, beginning not later than 5 years after enactment and annually thereafter, to identify any such program, State plan, or waiver with at least a 400 percent increase in payments or providers over the preceding 5-year period and to audit any such program, plan, or waiver. This section amends section 1902 of the Social Security Act to add the notification requirement for State Medicaid agencies and makes conforming changes to CHIP. Subsections (a) and (b) and the amendments made by subsection (c) take effect 180 days after the date of enactment.

This section directs the Director of the Office of Management and Budget to prescribe guidance to all federal agencies ensuring recovery of all improper payments. This section also amends annual Inspector General reporting requirements under 31 U.S.C. 3353 to include the amount of improper payments recovered by each executive agency in the covered fiscal year.

This section prohibits an associate of a small business concern who is finally convicted of financial misconduct or false statements related to a covered loan or grant from receiving financial assistance from the SBA Administrator, other than under section 7(b) of the Small Business Act. It also bars the small business concern itself from receiving such assistance if it has an associate subject to the prohibition. Covered loans and grants include those made under paragraphs (36) or (37) of section 7(a), section 7(b) in response to the COVID-19 pandemic, section 5003 of the American Rescue Plan Act of 2021, and section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. The prohibition applies only to contracts or agreements entered into on or after the date of enactment.

This section requires the Inspector General of the Department of Health and Human Services to open an investigation into any State program receiving Federal financial assistance administered by the Secretary if total payments to providers of services and suppliers increase by 10 percent or more during any 6-month period compared to the prior 6-month period.

This section rescinds the unobligated balances of amounts made available under the American Rescue Plan Act of 2021, Division M or N of the Consolidated Appropriations Act, 2021, the Paycheck Protection Program and Health Care Enhancement Act, the CARES Act, the Families First Coronavirus Response Act, and the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020. Amounts rescinded remain in the general fund of the Treasury for deficit reduction, unless the President submits a waiver notice to the House Budget Committee and Senate Finance Committee within 60 days of enactment for any account or program on national security grounds.

This section expands the cost savings disclosures and awards program under subchapter II of chapter 45 of title 5, United States Code, to include employee identification of surplus salaries and expenses funds. (As background, the program authorizes cash awards to federal employees who disclose fraud, waste, or mismanagement.) The section defines surplus salaries and expenses funds as amounts in an agency’s salaries and expenses account (or equivalent) that an employee identifies as unnecessary, that the agency Inspector General (or designee) and Chief Financial Officer determine are not required for their original purpose, and whose rescission would not impair program execution. It directs agencies to transfer identified surplus funds to the Treasury general fund for deficit reduction (or debt reduction if no deficit exists in that fiscal year), while permitting the agency head to retain up to 10 percent of such amounts for cash awards to identifying employees and, to the extent any funds remain, for other agency purposes. The section requires each agency to submit annual reports to the Secretary of the Treasury on total savings achieved and on meritorious disclosures and awards, to include this information in its budget request to OMB, and to comply with standards issued by the Inspector General and Chief Financial Officer. It further directs the Director of the Office of Personnel Management to ensure program compliance and issue annual certifications to Congress, and requires the Comptroller General to submit a report to Congress on program operation every three years beginning three years after enactment.

This section adds to the required contents of the President's annual budget submission a detailed report on improper payments, as defined in 31 U.S.C. 3351, for all programs and activities at executive agencies that must submit improper payment reports under subchapter IV of chapter 33. The report must include a narrative explanation of why improper payment amounts and rates occurred, trends over the previous three years for programs whose rates increased, decreased, or remained unchanged, and any incomplete corrective actions along with planned steps to address remaining issues.

This section applies the Improper Payments Information Act of 2002 and the Improper Payments Elimination and Recovery Act of 2010 to States with respect to the Temporary Assistance for Needy Families (TANF) program funded under part A of title IV of the Social Security Act and any other State program funded with qualified State expenditures, in the same manner as such Acts apply to Federal agencies. This section requires the Secretary of Health and Human Services to issue regulations within 2 years governing how States review and report improper payments under such programs and to submit a report to Congress within 1 year containing a plan to reduce or eliminate improper TANF payments within 10 years.

This section adds a non-supplantation requirement to the Temporary Assistance for Needy Families (TANF) program. Funds made available to a State under the program must supplement, and not supplant, State general revenue spending on activities described in section 404 of the Social Security Act (i.e., providing assistance to needy families, promoting job preparation and work, preventing out-of-wedlock pregnancies, and encouraging two-parent families).

This section revises state data reporting requirements under section 411 of the Social Security Act for the Temporary Assistance for Needy Families program. It requires full-population data reporting by striking the sample-based reporting option in subparagraph (B), removing the general reporting requirement heading, and redesignating the remaining provisions as paragraph (1) with adjusted indentation and lettering. It updates work participation reporting by replacing prior subparagraphs (K) and (L) with new requirements to report each family member's work eligibility status, monthly hours of participation in work activities (including zero hours) for work-eligible individuals, reasons for non-work-eligible status, and reasons for lack of participation among work-eligible individuals and other adults. It also revises employment and earnings outcomes reporting by directing the Secretary of Health and Human Services, in consultation with the Secretary of Labor, to determine the necessary information for computing such outcomes and the related statistical adjustment model, which states must collect and report.

This section revises data exchange standards for improved interoperability under part A of title IV of the Social Security Act. It requires the Secretary of Health and Human Services, in consultation with an interagency work group and considering State perspectives, to designate standards governing electronic exchanges of required information between State agencies and Federal reporting, incorporating widely accepted nonproprietary formats such as eXtensible Markup Language and interoperable standards such as the National Information Exchange Model, while ensuring consistency with accounting principles and cost-effectiveness. This section also directs the Secretary to issue a proposed rule not later than 24 months after enactment that identifies federally required data exchanges with specifications and timing, addresses standardization factors, and specifies State implementation options and future milestones.

This section defines terms used throughout the title, including agent of a covered foreign principal, controlled, covered foreign principal, covered nation, direct financial assistance, indirect financial assistance, pass-through entity, and related concepts. Covered nation means the Democratic People’s Republic of Korea, the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Islamic Emirate of Afghanistan, and 18 other specified countries.

This section provides a rule of construction specifying that nothing in the title terminates United States financial assistance to entities that are not controlled by an agent of a covered foreign principal or any foreign assistance (as defined in section 634(b)(1) of the Foreign Assistance Act of 1962).

This section establishes a policy of the United States to oppose foreign assistance to the Taliban by foreign countries and nongovernmental organizations, particularly recipients of United States assistance, and to review United States assistance provided to any such entities that have aided the Taliban. This section requires the Secretary of State to submit a report within 180 days identifying foreign countries and nongovernmental organizations that have provided assistance to the Taliban, including the amounts of United States and other assistance involved and how the Taliban has used it, as well as United States efforts since August 2021 to discourage such assistance. This section directs the Secretary of State to develop and implement a strategy within 180 days to discourage foreign assistance to the Taliban, including support for Afghan women and girls that does not benefit the Taliban, and to submit an initial report on the strategy upon its completion along with implementation reports every 180 days for the following five years. This section requires the Secretary of State to submit a report within 30 days on the termination of the bounty on Sirajuddin Haqqani and other Haqqani Network members under the Rewards for Justice program, including the status of bounties and designations, any United States engagements since September 1, 2021, and new information on terrorist attacks. This section requires the Secretary of State to immediately suspend all United States foreign assistance to any country or nongovernmental organization determined to have provided assistance to the Taliban.

This section directs the Secretary of State to submit a report within 90 days after the date of enactment of this Act to the appropriate congressional committees on United States Government-funded direct cash assistance programs in Afghanistan during the period beginning August 1, 2021, and ending 30 days after the date of enactment. The report must include a general description of implementing partners and recipients, methods of payments, currency exchanges, use of hawalas and related oversight mechanisms, concealment of personally identifiable information of recipients, and measures to prevent Taliban access to assistance. In this section, the term “hawala” means a system of transferring money through a network of money lending brokers.

This section directs the Secretary of State, in consultation with the Secretary of the Treasury, to submit a report to the appropriate congressional committees on the status of the Afghan Fund not later than 90 days after the date of enactment and every 180 days thereafter for 5 years, including a list of Taliban members at Da Afghanistan Bank or on its board and descriptions of the Taliban’s influence over the Bank, the Fund’s board of trustees and vetting process, conditions for releasing funds to the Bank, the board’s decision-making process, and controls to prevent diversion or misuse by the Taliban. This section also rescinds all unobligated balances from amounts appropriated or otherwise made available for reconstruction activities in Afghanistan through 21 specified funds, programs, and accounts—including the Afghanistan Security Forces Fund, Economic Support Fund, International Narcotics Control and Law Enforcement, Commanders’ Emergency Response Program, and Development Assistance—and transfers the rescinded amounts to the general fund of the Treasury for deficit reduction.

This section expresses the sense of Congress that the United States should not normalize diplomatic relations with the Taliban unless the Taliban coordinates with the United States to expel al-Qaeda and other terrorist groups from Afghanistan, ceases the taking of U.S. citizens as hostages and the wrongful detention or persecution of Afghans who worked for or on behalf of the United States or the former Afghan government or security forces or advocated for good governance or human rights, repeals all edicts prohibiting and takes demonstrable action to support the education, employment, free movement, and free expression of women and girls, and repeals all edicts curtailing and takes demonstrable action to support the rights of ethnic, religious, and other minority groups including Hazara communities.

This section establishes the definition of “appropriate congressional committees” for purposes of this title as the Senate Committee on Foreign Relations, the Senate Committee on Appropriations, the House Committee on Foreign Affairs, and the House Committee on Appropriations.

This section expands federal award reporting requirements under the Federal Funding Accountability and Transparency Act of 2006 to include other transaction agreements on USAspending.gov. It directs the Secretary of the Treasury to ensure automatic transmission of other transaction agreement data to the website and a centralized public view of such data within 3 years after the date of enactment of the Stop Secret Spending Act of 2026. It requires the Secretary, in consultation with the Director of the Office of Management and Budget, to post an annual report on the website beginning 1 year after enactment that discloses the total amount of unreported federal spending and the reasons for nonreporting, including national security or classified status, legislative or judicial branch awards, and subawards below the primary level. If data standards are not met within 1 year after enactment, it requires publication of a detailed compilation of all other transaction agreements from the prior fiscal year; if not met within 2 years, it requires submission to Congress of a plan for full incorporation by the 3-year deadline.

This section revises reporting and disclosure requirements under the Federal Funding Accountability and Transparency Act of 2006. It limits Inspector General reports on federal spending data to agencies described in paragraphs (1) or (2) of section 901(b) of title 31, United States Code, and requires the first such report no later than 1 year after enactment of the Stop Secret Spending Act of 2026, with subsequent reports due at least once every 2 years thereafter until 10 years after that enactment date. It also establishes new requirements for data quality and display standards, directs the Secretary and Director to assess and publish a list every 2 years (beginning 1 year after enactment) of the specific federal agencies and components required to post spending information, and makes the amendments to agency posting obligations effective upon publication of the first such list.

This section directs the Comptroller General of the United States to recommend any advisable updates to clause 2.204-10 of the Federal Acquisition Regulation to incorporate requirements under the Federal Funding Accountability and Transparency Act of 2006, not later than 1 year after the date of enactment of this Act.

This section sets forth congressional findings on the use of artificial intelligence in financial services. The findings state that AI is being deployed in new ways by banks and credit unions, may benefit institutions and consumers, and creates unique risks to account safety and security; they further note that voice banking is widely offered for convenience, that social media has increased the availability of audio and video for bad actors, and that deepfakes could be used to commit data theft, identity theft, or fraud.

This section directs the Secretary of the Treasury, in consultation with the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Bureau of Consumer Financial Protection, the Financial Crimes Enforcement Network, the National Credit Union Administration, and private-sector stakeholders, to submit a report to Congress on the use of artificial intelligence in the financial sector. The report must include a description of how banks and credit unions use AI to protect against fraud, standard definitions for terms such as “generative AI,” “machine learning,” “natural language processing,” “algorithmic AI,” and “deep fakes,” potential risks from bad actors using AI for data theft and fraud, best practices for financial institutions to safeguard consumers, and legislative and regulatory recommendations; the Secretary must solicit public feedback within 90 days of enactment and consult with depository institutions and credit unions of varying asset sizes, third-party AI vendors, and AI experts.

This section establishes a 10-year statute of limitations for criminal prosecutions and civil enforcement actions alleging violations of, or conspiracies to violate, specified fraud, theft, false statements, money laundering, and false claims provisions of titles 18 and 31, United States Code, in connection with grants awarded under the Shuttered Venue Operators Grant program or the Restaurant Revitalization Grant program.

This section extends the statute of limitations for criminal prosecutions and certain civil actions involving pandemic-era program violations. It defines pandemic-era laws to include the CARES Act, American Rescue Plan Act of 2021, and five other specified coronavirus response statutes, along with their amendments, and defines pandemic-era program violations as offenses relating to programs or funding authorized under those laws. (1) For criminal offenses, it extends the period to 10 years after commission (from 5 years under 18 U.S.C. 3282(a)), excluding any offense for which the original limitations period had already expired before enactment. (2) For civil forfeiture actions under the Tariff Act of 1930, it sets a 10-year period after discovery of the violation or 3 years after discovery of the property's involvement, whichever is later. (3) For False Claims Act actions under 31 U.S.C. 3730, it extends the period to 10 years after the violation (from 6 years under 31 U.S.C. 3731(b)(1)), and it applies the same 10-year period to notices under the Program Fraud Civil Remedies Act.

This section establishes mandatory reporting and verification requirements for payment information in Treasury disbursement systems by adding section 3337 to subchapter II of chapter 33 of title 31, United States Code. For each payment submitted for disbursement, the head of an agency must report a brief description of the payment's purpose, the appropriations account (Treasury Account Symbol), and the type of activity (Business Event Type Code). The section requires annual evaluation and written confirmation of the accuracy of reported information by certifying officials, as well as public disclosure of the data on the website operated under the Federal Funding Accountability and Transparency Act of 2006 within 30 days after certification. It authorizes the Secretary of the Treasury to issue implementing regulations or guidance and includes a rule of construction providing that no legal liability is imposed on disbursing officials for actions taken under the section.

This section expands access to federal data sources for the Do Not Pay Initiative to identify, prevent, and recover improper payments. (1) It grants the Secretary of the Treasury access to the National Directory of New Hires and authorizes redisclosure of such information to Treasury agents and contractors, federal and non-federal agencies already permitted to receive the data, and additional persons or entities agreed to by the Secretaries of the Treasury and Health and Human Services. (2) It amends the Fair Credit Reporting Act to exclude from the definition of adverse action any change to a federal disbursement (including pre-certification termination) based on a consumer report to improve disbursement accuracy, as well as any related action by an authorized user of the Do Not Pay working system, and to permit Treasury to obtain and redisclose consumer reports for improper payment purposes. (3) It authorizes the IRS to disclose to Treasury, in a privacy-preserving manner, specific return information—including taxpayer identification number, filing status, adjusted gross income, Schedule C income or loss, filing year, identity theft indicators, and non-filing status—for at least the three most recent taxable years, for use in the Do Not Pay working system by Treasury agents, contractors, and authorized federal and state agencies. (4) It requires the Social Security Administration to enter into an agreement to regularly provide Treasury with personally identifiable information, including name, date of birth, and Social Security number, solely for enhancing the Do Not Pay working system.

This section requires individuals applying or reapplying for benefits under specified public assistance programs to provide a written declaration under penalty of perjury that they will not conduct remittance transfers while receiving such benefits and imposes a $100,000 fine for violations. The requirements apply to any payment or other benefit provided after the date that is 30 days after the date of enactment of this Act.

This section establishes a Veterans Scam and Fraud Evasion Officer in the Veterans Experience Office of the Department of Veterans Affairs to oversee fraud and scam prevention, reporting, and incident response plans and to serve as a central point of contact directing veterans, their families, caregivers, and survivors to prevention and mitigation resources. The officer must provide strategic communications during incidents, issue enterprise-wide guidance on identifying and reporting fraud, promote the VSAFE Fraud Hotline and VSAFE.gov, develop fraud metrics monitoring and employee training plans, coordinate with the VA Inspector General and specified federal agencies including the IRS, DOJ, CFPB, DOD, SSA, and others, and consult with veterans service organizations and state, local, and tribal governments. The provision terminates on September 30, 2030, and authorizes no increase in full-time employees.

This section expands whistleblower protections against reprisal under section 4701 of title 10, United States Code, by redefining covered individuals as “protected individuals” and broadening the scope of protected activities. It covers contractors, subcontractors, grantees, subgrantees, and personal services contractors (including state, local, tribal, territorial, and intelligence community entities) of the Department of Defense or the National Aeronautics and Space Administration, as well as their current and former employees. Protected activities now include refusing to obey an order that would violate a law, rule, or regulation related to a contract or grant and disclosing gross mismanagement, gross waste of funds, abuse of authority, legal violations, or substantial dangers to public health or safety. The section also bars executive branch officials from requesting prohibited reprisals, authorizes proposals for disciplinary action against such officials, and prohibits waiver of rights through any predispute agreement, policy, or condition of employment.

This section expands protections from reprisal for disclosures of certain information by non-defense contractors, subcontractors, grantees, and subgrantees. It replaces references to “employees” with “protected individuals,” which now include contractors, grantees, subgrantees, their current and former employees, state, local, tribal, and territorial governments and their instrumentalities, elements of the intelligence community, and individuals performing personal services under contractual agreements. The section adds protection for refusing to obey an order that would require violation of a law, rule, or regulation related to a Federal contract, subcontract, grant, or subgrant, and for disclosing gross mismanagement of a Federal contract or grant, gross waste of Federal funds, abuse of authority, violations of law related to contracts or grants, or a substantial and specific danger to public health or safety. It prohibits executive branch officials from requesting reprisals, authorizes proposed disciplinary action against officials who make such requests, and provides that the rights, forum, and remedies under the section may not be waived by any agreement, policy, or predispute arbitration agreement.