Elon Musk, of the Department of Government Efficiency, has asserted that his goal is to cut some $1 trillion of “waste and fraud” from annual federal spending.  Skeptics of the effort say that that’s just not possible, mainly because almost half of federal spending constitutes the “entitlements” — Social Security, Medicare, Medicaid, and some smaller health insurance programs — and President Trump has pledged not to cut those.  Add something close to $1 trillion for defense, and another close to $1 trillion for interest on the national debt, and the remainder (less than $2 trillion) doesn’t leave nearly enough room for a trillion of cuts.

But here’s the missing piece: What if there are large amounts of fraud in the entitlement programs?  Trump hasn’t pledged not to go after that.  Could the amounts of such fraud be significant in the context of the huge numbers at issue?  I don’t fully know the answer to that question; but today I’ll look at one example involving very big numbers where obvious fraud is hiding in plain sight.

First, a look at the big picture numbers.  The Center on Budget and Policy Priorities has on its website an overview of federal spending dated January 28, 2025, providing figures for fiscal year 2024 (which ended on September 30, 2024).  The big categories:

• Federal spending for fiscal year 2024 was approximately $6.9 trillion.

• Health insurance entitlements (Medicare, Medicare, CHIP, and Obamacare subsidies totaled $1.7 trillion, or 24% of spending.

• Social Security totaled $1.5 trillion, or 21% of spending.

• Defense totaled $872 billion, or 15% of spending.

• Interest on the debt was about $892 million, or another 15% of spending.  

• The remainder added up to $1.936 trillion.

And now, here’s a good place to start looking for fraud in the entitlements.  In New York we have something called the Consumer Directed Personal Assistance Program.  Bloomberg had a piece about it in July 2024, which is behind paywall, but Newsweek re-wrote the story here.  The idea, supposedly, was that we could use Medicaid funds to pay relatives like spouses and children to take care of their infirm relatives, and thus save the costs of professional aides, let alone nursing homes.  From Newsweek: