“Michael, we’re bigger than U.S. Steel.” — Hyman Roth, “The Godfather Part II“

The mobsters in “The Godfather” set their sights way too low. If they really wanted to make it big time, they should have targeted federal entitlement programs instead of gamblers and drug addicts. Not only does it pay better, but you can count on one political party to look the other way.

The Government Accountability Office (GAO) figures that fraudsters make off with more than $500 billion of federal taxpayer money a year, plus another $184 billion in “improper payments.”

That isn’t just bigger than U.S. Steel. That’s five times as big as the entire steel industry.

Every day, it seems, there are reports of fraud, most of it involving federal entitlement programs. Everyone knows about the massive fraud uncovered in Minnesota, Ohio, and California. But the stories just keep trickling in.

Just last month, the Justice Department charged 455 defendants for what amounts to $6.5 billion in alleged false medical claims.

Around the same time, Herbert Leon Kimble was arrested in the Philippines on charges that he ran a $1.2 billion Medicare fraud conspiracy.

Investigators in Alaska charged 15 people with close to $2 million in Medicaid fraud.

A Brooklyn, N.Y., retailer has been charged with stealing more than $640,000 in food-stamp benefits from people in Ohio.

The truth is, we have no idea how much fraud there is. The GAO estimate is more of a guesstimate than a reliable figure, and the top number on its range is probably too low, given the lackadaisical efforts states put into fighting fraud. In New Mexico, for example, a state with the highest share of people on food stamps, a legislative report found that the state followed up only 3% of the tips it received about fraud.

But even if the GAO is right, the amount of fraud rivals the output of several major U.S. industries, as a new paper from the Advancing American Freedom Foundation shows in an eye-opening chart.

Given that more than $4 trillion of the federal government’s $7.4 trillion budget is in the form of transfer payments, the scale of fraud shouldn’t be surprising.

What is surprising is how determined Democrats are to keep the fraud going.

When evidence of widespread fraud emerged in California and Minnesota, for example, the governors of both states attacked the Trump administration for pointing it out, while pretending that they are dealing with the issue.

When Trump moved to deny Medicaid funds to states rife with fraud, “Democrats slammed the crusade as a smokescreen for … Trump’s war against blue states, and an attempt to divert attention from GOP cuts to healthcare programs.”

When Agriculture Secretary Brooke Rollins asked states to turn over food stamp enrollment data and offered to partner with them to root out fraud, 21 Democrat-controlled states refused to do so on spurious privacy grounds.

When Republicans in New Mexico pointed out that the Democrat-controlled state “rarely verifies, seldom audits, and barely investigates fraud” in its food stamp program, Democrats responded that fighting fraud threatened to “restrict eligibility.”

And, as we noted back in December, Democrats attacked DOGE — which was a modest attempt to find waste, fraud, and abuse in federal agencies — with such ferocity that it sparked violent protests.

The problem is that, even without opposition from Democrats, the government’s anti-fraud efforts are like bailing out a sinking ship with a spoon. There’s too much money available to fraudsters. There are way too many holes in the programs that make them easy to rip off. And catching the thieves takes time and effort.

Rachel Greszler, who authored the Advancing American Freedom report, says that Congress has the opportunity this year to seal the gaps by including several provisions in a new reconciliation bill.

A comprehensive package built around full benefit reporting, eligibility verification, accurate measurement, mandatory cooperation, and skin-in-the-game accountability would help protect taxpayers, preserve benefits for those truly in need, and reduce the hundreds of billions of dollars currently lost to waste, fraud, and abuse each year.

The only people who could be opposed to these commonsense reforms are the criminals and their patrons in the Democratic Party.

— Written by the I&I Editorial Board

See also:

Support Independent Journalism

Issues & Insights was founded by seasoned journalists from the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day -- without fear or favor.

We’re doing this on a voluntary basis because we believe in a free press and because we aren't afraid to tell the truth, even if it means being targeted by the left.

We are 100% reader supported!!

If you like what you see, please feel free to donate.

And be sure to tell your friends!

Related Articles