According to federal government data, the government loses more taxpayer dollars every year to fraud than it spends on the entire budgets of several Cabinet agencies. Thank goodness President Donald Trump has launched the Task Force to Eliminate Fraud and directed Vice President JD Vance to lead the effort.
The Government Accountability Office recently conducted a government-wide study to get an idea of just how much fraud costs taxpayers. That study estimated annual fraud losses to be between $233 billion and $521 billion. On the low end, that would pay for the entire budgets of the departments of State, Commerce, and Labor, and there would still be enough left over to pay for NASA; on the high end, you could add to the budgets of those departments the budgets of the departments of Education, Energy, Justice, and Interior.
That’s an awful lot of money to lose to deliberate theft every year. Keep in mind, we’re talking solely about fraud, not its siblings, waste and abuse.
The Trump administration is determined to address the fraud problem. He chose his highest-profile public address of the year (and the biggest audience of the year, which goes with it) to make the announcement; during his State of the Union address in late February, Trump announced a War on Fraud.
The very next day, Vance announced a pause on $260 million in federal government payments to the government of the state of Minnesota, home to a massive social services fraud that’s been unfolding over the last several years, and which could end up costing taxpayers as much as $9 billion. Vance announced the payments would be frozen until the state government put systems in place to show that the money was going to its intended recipients.
The implementation of the Trump administration’s “war on fraud” began with the announcement of the creation of a White House task force. It was followed by the vice president’s announcement of the pause on the cash flow to Minnesota. Those two steps were only the start.
In addition, the administration created a new senior position at the Department of Justice to focus on the problem. That position, the assistant attorney general for national fraud enforcement, has been filled by Colin McDonald. McDonald is a veteran federal prosecutor who has most recently been serving as associate deputy attorney general, the right-hand man to acting Attorney General Todd Blanche.
McDonald has the right kind of experience. In one particular case, when he was working as an assistant U.S. attorney in Southern California, he prosecuted the Honolulu police chief and his wife, along with two Honolulu police officers, for conspiracy and obstruction of justice for their roles in a public corruption scandal.
Demonstrating the White House’s commitment to the effort, Vance explained that the new assistant attorney general for national fraud enforcement will take direction from the president and the vice president.
Creating new positions and task forces and appointing people to fill out the org chart are important moves, but they’re only first and second steps on the road. The real test of the Trump administration’s commitment to its war on fraud will be what it does with those people and with others it’s already had working on the problem.
Early signals are encouraging.
For instance, the focus on Minnesota right out of the gate is important because the fraud there is centered on the state’s generous social services programs. Medicaid in particular is vulnerable to scammers. Its federal-state match, in which federal dollars heavily outweigh the states’ contributions, provides all the incentive needed for state-level welfare state bureaucrats to look the other way and fail to police their systems properly.
The vice president’s task force might also want to keep an eye on New York City, where Mayor Zohran Mamdani, an admitted democratic socialist, recently appointed Julie Su to serve as deputy mayor for economic justice. Su, who served as President Joe Biden’s acting secretary of labor, famously oversaw between $30 billion and $40 billion in fraudulent payments in her previous position as director of California’s Employment Development Department. Letting the new mayor know folks in Washington are keeping an eye on his administration might be a good preemptive strategy to help reduce or even prevent fraud before it ever occurs.
Theft of taxpayer funds is a cancer on the body politic. It’s long past time that the federal government took action to eliminate it. Thank goodness Trump and Vance are on the job.
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