When Kindness Becomes a Target: The $521 Billion Fraud Erosion in American Aid Programs

Americans spend hundreds of billions helping people in need. Fraudsters have learned to feed on that generosity—and sprawling government makes the feast easier.

Governments have handed out public work since men were laying stones on the Appian Way. And wherever government hands out money, people line up to get some. Abraham Lincoln famously complained that “there are too many pigs for the teats.”

The Democratic Socialists of America do not own the word “kindness.” During the New Deal, Franklin Roosevelt dramatically expanded Washington’s role in the economy and strengthened organized labor. The Wagner Act of 1935 guaranteed workers the right to organize and bargain collectively, making unions a central pillar of the Democrat coalition for decades.

Similarly, during the War on Poverty, Michael Harrington’s 1962 book The Other America helped force poverty onto the national political agenda. Lyndon Johnson’s anti-poverty task force later brought Harrington to Washington as a consultant. The federal government also needed a way to measure poverty—a metric developed principally by Mollie Orshansky, an economist at the Social Security Administration, whose thresholds became the basis of the official federal poverty measure.

The Great Society followed: Medicare, Medicaid, food assistance, housing programs, and vast expansions of Washington’s responsibility over Americans’ lives. Political debates over these programs have raged ever since—but one fact remains unambiguous: Americans have transferred staggering amounts of wealth through government because they believe people in genuine need should be helped.

That is kindness on an industrial scale. And wherever kindness operates on an industrial scale, thieves notice. The Government Accountability Office estimates the federal government loses between $233 billion and $521 billion annually to fraud, based on data from fiscal years 2018 through 2022. This is not “waste” in the loose political sense—it represents deliberate fraud.

Scandals nationwide illustrate this pattern: In Minnesota, the House Oversight Committee says at least $300 million was stolen through the Feeding Our Future child-nutrition scandal. Federal prosecutors charged 15 defendants in health care schemes involving more than $10.6 billion in fraudulent billings to Medicare, Medicaid, and private insurers in New York alone. Arizona’s Medicaid system faced a scheme targeting Native American addiction programs, with losses reaching into the billions—where one operator was sentenced to 14 years for fraudulently billing Medicaid over $69 million. In California, Paul Richard Randall orchestrated a scheme submitting nearly $270 million in false Medi-Cal claims for unnecessary medications, receiving $179 million in payments before serving 30 years in federal prison. Across seven Southeastern states, the Justice Department announced 17 cases involving more than $350 million in intended losses from SNAP, housing benefits, Small Business Administration loans, and tax fraud this summer.

This thieving from American kindness is nationwide. The Trump administration recently canceled Affordable Care Act policies covering roughly 760,000 people deemed fraudulent or ineligible, projecting about $2.2 billion in savings.

The Biden-era immigration surge adds another layer: the Congressional Budget Office estimates net immigration at nearly 3.3 million in 2023. Much of this increase includes individuals without lawful status—barred from SNAP, nonemergency Medicaid, SSI, TANF, and most federal housing assistance. States like California spend $22 billion annually on these programs anyway.

When Washington spends money on a colossal scale, responsibility becomes diffuse. A federal agency sends funds to a state; the state directs them to providers; providers bill programs; nonprofits administer aid. Somewhere along that chain, the pigs find the teats.

The alternative is industrial-scale socialism accompanied by industrial-scale fraud. Something else eventually gets stolen too: trust. Every dollar stolen from Medicaid makes taxpayers more suspicious of assistance programs. Every fake food-benefit claim hardens skepticism about families who truly need groceries. Every crooked nonprofit fuels the belief that “compassion” has become a business model.

That may be the most destructive theft of all. Americans who work, pay taxes, and agree to help their neighbors have every right to demand their money reaches those it was intended to help—and they have every right to be furious with the pigs at the teats who steal it.