MW New report casts significant doubt on Musk and Trump's government-fraud claims
By Brett Arends
Yet another setback for Elon Musk's claim of a $1 trillion 'DOGE dividend'
Less than a day after Elon Musk promised to find $1 trillion in free money by cutting "fraud and waste" from the federal government - an amount equal to about one federal dollar in seven - his claim has been undercut by yet another government report.
Total federal "improper payments" last year came to $162 billion, according to figures released by the Government Accountability Office.
And the Biden administration had already slashed that figure by a third, or $74 billion, from the year before, as pandemic-era programs were wound down, the GAO added.
The further you look into the report, the worse news becomes for everyone who had already been planning out how to spend their share of the so-called DOGE dividend.
For instance, the GAO's "improper payments" figure included $7.9 billion in underpayments, which is where the federal government failed to pay people what they were owed.
Deduct that figure from the total - and pay that money out, as intended - and the total savings Uncle Sam could have achieved last year by perfect accounting would have come to $146.2 billion, the GAO numbers show.
Oh, and even this includes $12.6 billion in so-called unknown payments, which the GAO says is where it is "unclear whether a payment was an error or not." So these might not be overpayments at all, either.
But even if we assume all of this is actual fraud and waste, the total was 2% of federal spending, which came to $6.8 trillion last year. So that leaves Musk about $850 billion short of the $1 trillion savings he promised Fox Business host, and former Trump White House economist, Larry Kudlow on Monday night.
For the purposes of illustration, $850 billion is roughly the size of the entire defense department.
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On the positive front, the GAO said its improper-payments report did not include any waste, fraud or abuse in the Temporary Assistance for Needy Families program, the Small Business Administration's Shuttered Venue Operators Grants program, or the Department of Housing and Urban Development's Office of Public and Indian Housing's Tenant-Based Rental Assistance.
It's lucky Musk is rocket scientist-adjacent. Maybe one of those people can make his math work. Quantum physics, maybe?
For all of us awaiting Musk's free-money bonanza and the "DOGE dividend," the news gets even worse.
A third of all this excess spending, $54.3 billion, was accounted for by waste, fraud and improperly coded payments in Medicare.
But if that seems like an easy way to cut waste, think again. That figure represents just over 5% of the Medicare budget, which had gross outlays of $1.05 trillion last year.
In comparison, the U.S.'s magnificently efficient private-sector health-insurance companies spend about 12% of their revenues on administrative costs in order to minimize waste, fraud and the like.
So, using the private sector as a benchmark, in order to slash that $54 billion in apparent waste and fraud, we would first have to spend ... er ... $120 billion a year on administrative costs instead.
That would leave us $66 billion worse off, costing the average American household an extra $500 a year.
At this rate, the so-called Department of Government Efficiency's "dividend" will end up as a cash call.
The GAO report comes shortly after a government investigation raised new questions about the claim made by Musk and President Donald Trump that vast numbers of dead people are receiving Social Security benefits. The Social Security inspector general found that although there were 760,000 "dead" people on the Social Security rolls in Idaho, just 86 of them, or 0.011%, had been sent benefit payments after their deaths.
Total savings, by eliminating all 86 of these overpayments, would come to $611,000 a year.
Musk continues to assert that the federal government doesn't merely include inefficiencies, waste and even fraud but that the sums involved are enormous and egregious, amounting to the biggest scam in American history.
During the Kudlow interview, the Tesla $(TSLA)$ and SpaceX CEO and owner of the social-media platform X, claimed the GAO recently found "half a trillion dollars" in annual fraud in federal spending. Actually, the GAO estimated a wide range, from $233 billion to $521 billion, and said that upper part of the range was heavily influenced by the pandemic years. The latest GAO data, showing a plunge in improper payments as special pandemic-era programs wound down, raise further doubts about how big ongoing fraud might be.
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It remains a mystery why no one else has noticed the enormous fraud that Musk alleges - not only among the GAO staff and all the inspectors-general across the federal government, but among potential whistleblowers, too. Those exposing $1 trillion in fraud in federal spending would be entitled to hundreds of billions of dollars in rewards. For some bizarre reason, no one seems to have wanted the money.
-Brett Arends
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March 13, 2025 08:33 ET (12:33 GMT)
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