Are There Frauds Worse Than That Minnesota Case? Let's Look Again At Donald Trump
The Trump administration has decided to make fraud in government programs in Minnesota into a national crisis requiring massive intervention by ICE and Border Patrol (don’t ask) because it was done in part by Black immigrants from Somalia. While Trump and his Republican minions have been hyperventilating over this fraud, it is worth using a little arithmetic to try to put in perspective.
Of course, arithmetic is not popular in elite circles. Even many liberals have yelled that we have to be very concerned about the Minnesota fraud, apparently because some of it was done by Black people and the Republicans are yelling about it. But I’ll confess to being an old-fashioned type who doesn’t think fraud by Black people is any worse than fraud by white people, even if Republicans yell about it. So, let’s do the numbers.
As best we can tell the amount of fraud in Minnesota in the federal pandemic-related programs the Trump gang is yelling about came to $250 million. (The ringleader was actually white.) There undoubtedly is additional fraud that will be found, but this is what we know about to date.
Trump has touted a figure of $20 billion, but there is no obvious basis in reality for this number. Remember, Trump has repeated boasted about $18 trillion in foreign investment coming into the country, that he won the 2020 election by millions of votes and that he will bring drug prices down by 1500 percent. Trump’s numbers often have nothing to do with the real world.
Let’s just ignore the Trump craziness and go with the $250 million figure of known fraud. By comparison, the inspector general of the Small Business Administration, Hannibal Ware, estimated fraud in the Paycheck Protection Program initiated in Trump’s first term was $200 billion. That would be equal to 800 Minnesota frauds.
In case you’re wondering how this fraud was dealt with, Trump didn’t send in ICE. Instead, Trump fired Mr. Ware, who is Black. He promoted the director of the Small Business Administration, Linda McMahon, to be education secretary in his current term.
There are other cases of much larger fraud that don’t seem to draw as much attention, much less the involvement of ICE, as the Minnesota fraud. For example, the Medicare Payments Advisory Commission estimates that Medicare loses about $40 billion a year to private insurers in the Medicare Advantage program because insurers exaggerate the severity of their patients’ healthcare conditions. This would be equal to 160 Minnesota frauds, also apparently without bringing the involvement of ICE.
We can also look to Donald Trump’s whack-job lawsuits. He has discovered that he can bring any lawsuit he wants against the government, for any amount, and then tell his lackeys to settle. He brought a $230 million case against the Justice Department because it prosecuted him for trying to overthrow the government and stealing classified government. He is apparently directing Attorney General Bondi to hand him the cash. This payment would be a bit more than 0.9 Minnesota frauds.
He is also suing the Internal Revenue Service for $10 billion because it allowed his tax returns for two years to leak. (Prior presidents have made their tax returns public, which Trump promised to do as well.) While it’s not clear what damages Trump could claim (a suit by another leak victim was settled with an apology), he apparently is ordering the IRS to also hand over the cash. While this settlement will have to be reviewed by a judge, it would be equal to 40 Minnesota frauds. (The Justice Department case is an administrative proceeding and requires no judicial review.)
One other item to throw into the mix, just so people can know where the money goes, is Trump’s plan to increase annual military spending by $500 billion. This would add more than $5 trillion to the debt over a decade, for those keeping score on such things. It seems the rationale is that we need more money to protect ourselves from the new enemies Trump has made. Anyhow, this increase in the military budget of 50 percent would be equal to 2000 Minnesota frauds.
To be clear, we absolutely should take seriously fraud in public social welfare programs, like what happened in Minnesota. This money is effectively being stolen from people who badly need it. Most of these programs are underfunded and the money going to fraudsters comes out of the pockets of the people standing in line who don’t get support they need.
However, we also need to keep the amount of fraud in context. Most of our tax dollars are not going to fraudsters from Somalia. In fact, if there had never been a penny of fraudulent payments to people from Somalia, it would not even be a rounding error in our budget data.
We know that Republicans, and especially Trump, exploit racism at every opportunity. Arithmetic may not be an adequate weapon to combat racism, but it can be a useful one. And decent people should use it.
Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.
Reprinted with permission from Dean Baker.
