I admit to being a fuddy-duddy, a curmudgeon, an old fogy when it comes to the public purse. I'll be 72 on Sunday (cash gifts only, please). I cut my teeth in politics by writing about the deficit, arguing that a $100 billion government shortfall was not sustainable. I also wrote about the scandal of the national debt, which stood at an unheard of $1.5 trillion in 1984.
Today, Congress yawns at a $2 trillion deficit, and there's a conspiracy of silence about the $38.5 trillion national debt.
The voter doesn't care either. We keep sending these spendthrifts back to Congress every two years after they rail against the deficit and national debt during the campaign, but they just spent the previous two years adding to it.
So I guess I shouldn't have been surprised when it's revealed that the federal government is a piggy bank for fraudsters, scammers, and even the states, who all rob the U.S. taxpayers for trillions of dollars over the last few decades.
As much as 10% COVID-19 relief funds, or at least $500 million, was handed out with the certain knowledge that a large chunk of that money would be given to criminals and con artists. The government knew that suspending many disbursement rules would lead to massive fraud, but they figured that enough of the trillions of dollars in cash that went out the door would end up helping a few people.
Few Americans cared. No one has been fired. No one in the government has been charged with a crime. No one in the government has paid a price for incompetence and stupidity. In fact, Julie Su, former Secretary of the California Labor and Workforce Development Agency, was made acting Secretary of Labor by Joe Biden, even though official estimates and independent audits consistently place the amount of fraudulent unemployment payments during her tenure at between $20 billion and $33 billion during and after the COVID-19 emergency. Inmates, using telephones in California prisons, defrauded taxpayers of $1 billion right in front of the noses of prison guards
The Somali Medicaid and Medicare fraud may reach more than $9 billion. While the Somali community deals with this scandal, what are the state and local governments going to do to see that it doesn't happen again?
The answer is not much.
CMS’s own estimate—“comfortingly low,” in the words of one professor—is that it made $87 billion in “improper payments” to fraudsters and people who provided insufficient documentation in 2024. The real number is likely double the official estimate; over the past decade, it totals more than $1 trillion in Medicaid losses.
State officials also engage in behavior that, while not technically fraudulent, is at least sketchy. Every year, 49 states (all but Alaska) use “provider taxes” to tap CMS for about $160 billion. Federal law says states should be raising this money themselves, but states use the “provider tax” loophole to evade this restriction. That’s one-sixth of total Medicaid spending. States can even divert some of the money to non-Medicaid purposes. Either way, each state that participates is effectively (if legally) stealing from taxpayers in other states. Further, when the federal government has repeatedly tried to constrain the provider-tax provision, states have created new workarounds and loopholes to keep the money flowing from the U.S. Treasury.
The states are in on the fraud. It's a free-for-all, and the criminal underworld is laughing at the United States all the way to the bank.
The states blame Washington while Washington blames the states. At this point, most of us probably don't care as much about who is at fault as who will fix it.
A trillion dollars in public health care funds stolen or wasted is a travesty, but Americans hardly notice. Nine billion stolen by immigrants barely registers on public opinion. No one has bothered to poll the public's feelings about Somali Medicaid fraud, even though it has already had political ramifications. Minnesota Gov. Tim Walz is refusing to run for another term because of the scandal.
“The government you elect is the government you deserve," said Thomas Jefferson. How true.
The new year promises to be one of the most pivotal in recent history. Midterm elections will determine if we continue to move forward or slide back into lawfare, impeachments, and the toleration of fraud.
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