Annual $600B federal fraud is killing us — crack down now

Why pay taxes when so much of your hard-earned money goes to fraudsters?  

Bureaucrats and elected politicians, mostly Democrats, scream in outrage when anyone tries to crack down on fraud by requiring proof of where government payouts are actually going.

They wring their hands and moan that safeguards mean delays, making poor children go hungry and harming families in need.

Meanwhile the needs of us taxpayers, saddled with paying these scammers, are simply ignored.

Until now: The enormity of the Minnesota rip-offs is sparking a nationwide rebellion against welfare criminals and the politicians who tolerate them.

The Minnesota fraud epidemic, which has gone on since 2014, robbed taxpayers of hundreds of millions — maybe even billions — of dollars, cash that was supposed to support subsidized day care, autism services and “Feeding our Future” meals for the poor.

Minnesota Gov. Tim Walz has been forced to give up his bid for re-election. 

Now Govs. Gavin Newsom and Kathy Hochul are on the hot seat to explain the even bigger taxpayer rip-offs they’ve allowed to fester in California and New York.

And more state politicians should soon be feeling the heat: US Treasury Secretary Scott Bessent said Saturday that a nauseating 10% of the federal budget is spent on fraud. 

Some politicians may benefit directly from the scams in the form of campaign donations and kickbacks — but many more are just too cowardly to call fraud out, fearing accusations of racism or cruelty to the poor.

So as President Donald Trump tries to root out the cheating, fraud-friendly governors like Hochul and Newsom offer only bluster — and a lawsuit.

In December, Trump’s Department of Health and Human Services announced that in view of the Minnesota fraud scandal, all states would have to provide enrollment and attendance data, receipts for expenditures or other hard evidence before they could get federal payments for child-care programs. 

The administration calls the effort “Defend the Spend” program.

Many states complied right away — but deep blue states resisted.

Last week, Trump froze child-care and family cash assistance to five states — New York, California Illinois, Colorado and Minnesota — due to their allegedly illegal use of taxpayer money.

Here’s the biggest laugh: Hochul responded by insisting there’s no evidence of fraud in New York, and joining with the other states to sue.

“We’ll be having a litigation strategy,” she declared. 

Sorry, governor, but New York is likely the welfare-fraud capitol of the nation — a major reason New Yorkers are taxed to death.

The Consumer Directed Personal Assistance Program is a notorious example.

It’s a practical idea, letting friends and relatives get paid to provide care for the sick and elderly, but CDPAP has been horrifically mismanaged. 

Scammers are billing the state for caring for the dead, or for multiple people at different addresses simultaneously — cashing in for as much as $200,000 a year.

In 2025, a staggering 623,000 people claimed to be home health and personal assistants, making it by far the biggest occupation in the state. 

CDPAP is supported by Medicaid, so taxpayers nationwide are supporting this abuse.

But Hochul would rather sue Trump than clean up the cheating.

On Friday, a federal judge temporarily blocked Trump’s freeze — but the merits of the case are with the president. 

The federal government is responsible for making sure funds are used honestly.

That’s why Senate Republicans must hold the line against the push to provide what Democratic Leader Chuck Schumer calls a “clean” three-year extension of the COVID-era enhanced subsidies for Obamacare plans. 

There’s nothing “clean” about it. Obamacare is stuffed with fraud. 

Allowing the dirty tricks to continue at huge cost to taxpayers is unacceptable.

The Government Accountability Office, a nonpartisan watchdog agency, found that people using fake identities to sign up for subsidized health insurance get through every time. 

Fraudsters use stolen Social Security numbers — in one case to sign up for 71 policies in a single year. 

Brokers and insurance agents enroll people without their knowledge and keep the commissions.

The scams have been going on for over a decade.   

The bureaucrats operating Obamacare could care less about the taxpayers footing the bill. 

Now, some House and Senate Republicans want to extend the Obamacare subsidy and cover their own political rear ends.

OK, but at least get something for the rest of us out of the deal: Demand fraud protection in exchange.

Any bill must have significant strings attached, like requiring checks on each applicant’s Social Security number — and halting any benefits to a number used more than once.

An extension must crack down on enrollment-industry fraudsters who profit from the government’s laxity, and kick them out of the system.

Are Democrats now the party of the scam artists, or do they stand for the taxpayers?

This week’s US Senate vote will tell.

Betsy McCaughey is a former lieutenant governor of New York.