Eliminating Fraud Will Not Balance the Budget

Vice President J.D. Vance has been tasked with leading the White House Task Force to Eliminate Fraud. Since President Trump signed an executive order establishing the task force in mid March, with the aim of investigating massive scams targeting federal programs, the administration’s “fraud czar” and his team have discovered significant financial exploitation across the country, prompting multiple civil and criminal actions.

The administration paused hundreds of millions of dollars in Medicare payments to Minnesota, California, and Maine due to rampant fraud related to fraudulent Hospice and home healthcare companies. After Daily Wire’s Luke Rosiak uncovered massive Medicare fraud in Ohio perpetrated largely by Somali immigrants, the administration immediately took up the case. The task force recovered stolen COVID-19th relief funds and referred $22 billion in fraudulent small business loans back to the Treasury for collection. The administration has identified over 10,000 suspected fraud cases in immigration student work programs. So far, federal prosecutors have charged over 100 individuals in several large-scale enforcement actions across the country.

The Trump administration’s “full-scale war on fraud” is a welcomed development, and one that is long overdue. The numbers are staggering. Federal agencies reported roughly $186 billion in improper payments in fiscal year 2025 alone, and the U.S. Government Accountability Office (GAO) estimates that the federal government loses between $233 billion and $521 billion annually to fraud, the upper end being affected by the explosion of fraud during the COVID-19 pandemic. Taxpayers have every right to be furious that hundreds of billions of dollars disappear into thin air every year due to incompetence, abuse, and outright criminality.

The only downside to investigating fraud is that combatting “waste, fraud, and abuse” gives politicians an excuse to ignore the larger structural problems driving the federal government’s deficits and debt. While voters hate corruption, and almost nobody objects to prosecuting thieves, they also have no appetite for the types of reforms that would be necessary to balance the federal budget.

While discussing the anti-fraud task force, White House Deputy Chief of Staff Stephen Miller said “based on what I’ve heard, we could balance the federal budget if the only dollars that went out of the treasury went to individuals who were properly, lawfully, correctly eligible to receive them.” Unfortunately, Mr. Miller is way off. The Treasury Department is expecting this year’s deficit to exceed $2 trillion. Even if Vance and company discover that fraud amounts to double the GOA’s estimate, the government would still be running a deficit well north of $1 trillion.

In fiscal year 2025, mandatory entitlement spending reached $4.2 trillion, an absurd 60% of total spending. Interest payments on the national debt now exceed all defense spending combined. The government paid $970 billion in interest in 2025, and interest payments on the $39 trillion debt are expected to top $1 trillion this year. Defense spending is roughly $950 billion, and President Trump has proposed raising the Pentagon’s budget to a preposterous $1.5 trillion, however Congress is unlikely to approve.

Without touching the third rail of American politics, it is impossible to balance the federal budget or address the national debt. President George W. Bush made Social Security reform a priority after his 2004 re-election, but attempts to privatize parts of the behemoth ultimately failed. Former Congressman and later Speaker of the House Paul Ryan’s “Path to Prosperity” budget resolution that aimed to reform Medicare and Medicaid, and simplify the federal tax code, passed the House multiple times between 2011 and 2014, but was never taken up by the Senate.

The trust funds that support Social Security and Medicare Part A are projected to become insolvent in 2033, which will trigger automatic 23% and 11% reductions in benefits, respectively, regardless of income or need. Unfortunately, Washington will likely continue to cut waste on the periphery while ignoring the root causes of the deficit, until the bill comes due.