<\/p>\n
(The Center Square) \u2013 The Biden administration called the government\u2019s only estimate of annual fraud losses \u201cnot plausible.\u201d Now, the Trump administration says fraud costs taxpayers hundreds of billions annually.\n<\/p>\n
\u00a0<\/p>\n
The U.S. Government Accountability Office estimated in April 2024 that the federal government loses between $233 billion and $521 billion annually to fraud. It was the first and only government-wide estimate of its kind, representing 3% to 7% of average federal obligations.\n<\/p>\n
The estimated losses work out to between $1,431 and $3,200 for each of the nation\u2019s estimated 162.8 million individual income tax filers, according to IRS data.\n<\/p>\n
The wide range reflects different risks over the five-year period the estimate covers. GAO used a Monte Carlo simulation to account for uncertainty in fraud data, including fraud that goes undetected, noting that higher-risk environments such as pandemic-era spending are associated with estimates at the upper end of the range.\n<\/p>\n
The Biden administration rejected the estimate. Jason Miller, then the deputy director for management at the Office of Management and Budget, said in April 2024 that the estimate was \u201cnot plausible\u201d and would \u201ccreate confusion and promote misleading generalizations that have no factual connection to specific federal programs.\u201d\n<\/p>\n
The Trump administration has taken a different view. An OMB spokesman told The Center Square that while \u201cit\u2019s hard to know the exact figure, annual losses to fraud have been enormous, certainly numbering in the hundreds of billions.\u201d\n<\/p>\n
But none of GAO\u2019s three recommendations has been fully implemented. As of March 2026, OMB had no update on two recommendations aimed at improving fraud-related data collection. A third recommendation, directed at the Treasury Department, also remains open.\n<\/p>\n
Rebecca Shea, director of GAO\u2019s forensic audits and investigative service, told The Center Square that the agency has no plans to update the spending-side estimate, in part because GAO recommended Treasury develop an approach for doing so going forward.\n<\/p>\n
She also said the Department of Government Efficiency\u2019s claimed savings of $215 billion, tracked on the agency\u2019s public savings log known as the wall of receipts, and GAO\u2019s fraud estimate are not measuring the same thing.\n<\/p>\n
\u201cFrom what is available on the wall of receipts, their savings estimates are based on a wider range of activities than fraud,\u201d Shea said. \u201cFor example, DOGE\u2019s website also notes savings from asset sales, contract and lease cancellations and renegotiations, grant cancellations, interest savings, programmatic changes, regulatory savings and workforce reduction.\u201d\n<\/p>\n
David Walker, former U.S. comptroller general and chairman of the Federal Fiscal Sustainability Foundation, a nonprofit focused on limiting federal spending and debt, echoed that assessment.\n<\/p>\n
\u201cDOGE tried to do work to deal with that, but they didn\u2019t do what needs to be done,\u201d Walker told The Center Square. \u201cThey didn\u2019t do it the right way, and they grossly overstated how much money they quote unquote saved.\u201d\n<\/p>\n
Walker said that contract and grant cancellations do not automatically translate to savings.\n<\/p>\n
\u201cJust because you cancel a contract or a grant doesn\u2019t mean you\u2019ve saved the money, because only Congress can cut spending,\u201d he said.\n<\/p>\n
Daniel Kowalski, a former Trump administration OMB official and director of the Heritage Foundation\u2019s Grover M. Hermann Center for the Federal Budget, was more blunt.\n<\/p>\n
\u201cDOGE was not focused on fraud as much as it was focused on efficiency,\u201d he told The Center Square. \u201cIt was the Department of Government Efficiency and not the Department of Fraud Elimination. I don\u2019t think there\u2019s a way to map DOGE onto the GAO fraud report.\u201d\n<\/p>\n
Kowalski said the GAO estimate is credible.\n<\/p>\n
\u201cIt\u2019s the best number available,\u201d he said. \u201cI would not be surprised if the fraud number was closer to the high end of the GAO estimate \u2013 7% of program costs or $500 billion-plus a year.\u201d\n<\/p>\n
Walker said two root causes drive the problem.\n<\/p>\n
\u201cWe have inadequate internal controls before the money goes out, because once the money goes out, you\u2019re probably not going to get it back,\u201d he said.\n<\/p>\n
Walker singled out self-certification as a particular vulnerability.\n<\/p>\n
\u201cFraudsters have no problem saying that they\u2019re qualified for something, even though they know they\u2019re not,\u201d he said. \u201cYou shouldn\u2019t be able to self-certify. That\u2019s ridiculous.\u201d\n<\/p>\n
Kowalski said organized crime has moved aggressively to exploit those weaknesses.\n<\/p>\n
\u201cFraud against the federal government has become big business,\u201d he said. \u201cWe\u2019ve seen true organized crime rings created to defraud the government \u2013 there\u2019s the wholesale fabrication of child nutrition and autism therapy in Minnesota, nonexistent hospice services in California, and the multistate durable medical equipment fraud carried out by a Russian-based transnational criminal organization in Operation Gold Rush \u2013 the largest health care fraud case by dollar amount ever charged by the Justice Department.\u201d\n<\/p>\n
Operation Gold Rush, announced by the Justice Department in June 2025, resulted in charges against 19 defendants connected to a Russian-based transnational criminal organization that allegedly submitted $10.6 billion in fraudulent Medicare claims for durable medical equipment.\n<\/p>\n
GAO\u2019s Shea said a revenue-side fraud estimate is expected this fall.\n<\/p>\n
The White House did not respond to a request for comment by deadline. Treasury responded but did not address GAO\u2019s recommendation that the department develop a government-wide fraud estimation methodology.\n<\/p>\n
Walker said that even aggressive fraud reduction cannot solve the government\u2019s broader fiscal problems.\n<\/p>\n
\u201cWhen you\u2019re running $2 trillion a year deficits, attacking fraud, waste, abuse, and mismanagement can help, but they can\u2019t solve our problem,\u201d he said. \u201cWe need comprehensive fiscal reforms involving discretionary spending, mandatory spending, and taxes \u2013 and we need to do it sooner rather than later.\u201d\n<\/p>\n
This article was originally published at The Center Square. Photo Credit: Oba San\/\u0418\u0437\u043e\u0431\u0440\u0430\u0436\u0435\u043d\u0438\u044f \u043f\u043e\u043b\u044c\u0437\u043e\u0432\u0430\u0442\u0435\u043b\u044f Oba San via Canva Teams.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" (The Center Square) \u2013 The Biden administration called the government\u2019s only estimate of annual fraud losses \u201cnot plausible.\u201d Now, the Trump administration says fraud costs taxpayers hundreds of billions annually. Become a Monthly Ministry Partner today. \u00a0 The U.S. Government Accountability Office estimated in April 2024 that the federal government loses between $233 billion and<\/p>\n","protected":false},"author":1,"featured_media":27892,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[3580,10052,2330,3058,1936,165],"class_list":["post-30234","post","type-post","status-publish","format-standard","has-post-thumbnail","category-prayer","tag-billion","tag-costing","tag-federal","tag-fraud","tag-taxpayers","tag-year"],"_links":{"self":[{"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/posts\/30234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/biblelon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30234"}],"version-history":[{"count":0,"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/posts\/30234\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/biblelon.com\/index.php?rest_route=\/wp\/v2\/media\/27892"}],"wp:attachment":[{"href":"https:\/\/biblelon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/biblelon.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/biblelon.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}