When you listen to nearly any politician’s speech, and it comes to the point of paying for all of their agenda, they never mention that they’ll raise taxes or put off paying for their plans by loading your grandchildren with debt; instead, you hear that they’ll pay for it by cutting “waste, fraud, and abuse.”
Of course, Your Survival Guy wants waste, fraud, and abuse (what’s abuse?) cut, but the same politicians promising to make the cuts are the ones who designed the programs currently being wasted, defrauded, and abused. So temper your expectations.
At the Cato Institute, Romina Boccia and Tyler Turman drill down on four of the programs being abused the most: Medicaid, SNAP, TANF, and SSI. They write:
Waste, fraud, and abuse in federal welfare programs cost taxpayers billions of dollars each year. Medicaid, the Supplemental Nutrition Assistance Program (SNAP), child nutrition programs, Temporary Assistance for Needy Families (TANF), and Supplemental Security Income (SSI) are among the largest of the more than 90 means-tested federally funded welfare programs, which collectively cost taxpayers nearly $1.2 trillion in fiscal year (FY) 2025.1 Whether administered by state or federal agencies, these programs share structural flaws that make financial mismanagement pervasive.
The most tracked form of misspending is improper payments, which include underpayments and overpayments from administrative errors and outright fraud. Medicaid and SNAP alone accounted for more than $47 billion in improper payments in FY 2025, according to the Government Accountability Office (GAO).2 Another type of mismanagement is the manipulation of program rules. This includes state exploitation of financing mechanisms, waiver authorities, and eligibility loopholes to maximize federal funding, avoid accountability, or redirect federal dollars beyond programs’ intended purposes.
These problems are driven largely by two reinforcing weaknesses. The first is a financing mismatch whereby states process applications and distribute benefits while federal taxpayers finance most, or all, of the expenditures. This leaves states with weak incentives to enforce eligibility standards, invest in fraud prevention, or control waste, since the consequences of financial mismanagement fall overwhelmingly on federal taxpayers. The second is administrative complexity, which is exacerbated by outdated verification systems, reliance on self-reported eligibility data, and underutilized fraud-prevention tools, such as the Treasury’s Do Not Pay system.3
These deficiencies produce error-prone processes that make programs vulnerable to misspending that is difficult to prevent and easy to overlook. Addressing them requires structural reforms that align incentives, modernize verification systems, and hold program administrators accountable for poor outcomes. Congress began that work through the One Big Beautiful Bill Act (OBBBA), which strengthened program integrity in Medicaid and SNAP. This brief recommends ways for Congress to build on those reforms and bring similar accountability measures to child nutrition programs, TANF, and SSI. Savings estimates drawn from Congressional Budget Office scores, other publicly available analyses, and the authors’ calculations are included where available.
After detailing the problems in the various programs, the authors conclude:
Waste, fraud, and abuse are not confined to any one agency or federally funded welfare program. They persist because of misaligned incentives, fragmented administration, and outdated verification systems. Effective reforms should better align program authority with financing responsibility. In most state-administered welfare programs, states exercise broad discretion over program administration while bearing little of the cost. This dilutes accountability and creates incentives that reward more spending over better stewardship. Yet, as SSI demonstrates, even without this state–federal incentive misalignment, administrative complexity and outdated verification systems contribute to billions of dollars in improper payments each year. Structural reform must therefore address both the incentives that allow financial mismanagement to persist with little accountability and the administrative failures that make fraud and payment errors difficult to prevent.
Congress can save federal taxpayers nearly $6 trillion over the next decade by adopting the structural reforms proposed in this brief, namely eliminating federal SNAP, TANF, and child nutrition funding, and converting Medicaid and CHIP into a zero-growth block grant.74 These reforms would help address the structural incentive problems that are driving widespread financial mismanagement in these programs, giving states a more direct financial stake in improving program performance by preventing fraud and reducing administrative failures that they have been slow to address. Short of that, Congress can still save federal taxpayers nearly $500 billion over the next decade by tightening eligibility standards, ending financing gimmicks, and eliminating outdated funding streams.75
If the federal government continues to operate and fund these programs, it has an obligation to ensure that taxpayer dollars are not lost to preventable waste, fraud, and administrative failures. Congress should, at a minimum, pursue reforms that strengthen verification systems, enhance oversight, and reduce abuse.
Action Line: Adding additional debt and taxes to support fraudsters and wasters is not an option when America’s debt is soaring exponentially. Every dollar spent must be for maximum efficiency. Vice President JD Vance is working hard with the administration’s fraud task force to eliminate fraud from the system, but even more must be done. Click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.