One of many first casualties of the second Trump administration has been america Company for Worldwide Growth (USAID).
The company, which funds and operates humanitarian support applications all the world over, has rapidly turn into a goal for Republicans. Over the previous 4 weeks, the White Home has been pursuing a plan to scale back USAID’s workforce from over 10,000 folks to simply about 290. The trouble has gone to this point that, in Washington, DC, indicators for the company have both been coated in black tape or eliminated solely.
There are many explanation why the Trump administration — and Elon Musk’s so-called Division of Authorities Effectivity (DOGE) — is likely to be so fixated on USAID particularly. It could possibly be a part of their effort to dramatically cut back federal spending, utilizing USAID as a trial run earlier than dismantling different authorities companies. Or it could possibly be that Trump and his allies see little worth in international support. But when this actually was a case of saving taxpayer cash, as they declare, it doesn’t make a lot sense; within the final fiscal yr, USAID spent lower than 1 p.c of the federal price range.
However the Trump administration’s assault on USAID does inform us one thing broader about Republicans’ view on authorities spending — particularly, what they may take into account to be wasteful spending: applications that assist the poor. And the way in which they’ve justified the dismantling of USAID — by categorizing it as rife with fraud and mismanagement — might give us a glimpse into how they may strategy home welfare applications.
An announcement from the White Home earlier this month lamented that USAID has, apparently, “been unaccountable to taxpayers because it funnels large sums of cash to the ridiculous — and, in lots of instances, malicious — pet tasks of entrenched bureaucrats.”
It doesn’t matter that the billions of {dollars} that USAID spends have supported life-saving meals distribution and STD-prevention applications. And it doesn’t matter that USAID’s famine warning system helps organizations around the globe decide the place to deploy humanitarian reduction. What issues to Trump and his allies are the tales — a few of which, it needs to be famous, aren’t even true — that assist their argument that fundamental humanitarian help applications are riddled with waste and abuse.
Successfully shutting down USAID may have main penalties for hundreds of thousands of individuals overseas, and it must also function a warning for individuals who care about antipoverty applications right here at residence. When applications like meals stamps or Medicaid are on the chopping block, chances are high Republicans are going to show to the identical argument: These applications are wasteful, so why ought to we fund them?
USAID at this time. Medicaid tomorrow?
All through the presidential marketing campaign, Trump promised to not lower applications like Medicare and Medicaid, however the crimson flags had been exhausting to overlook. “There’s a lot you are able to do when it comes to entitlements, when it comes to reducing and when it comes to additionally the theft and the unhealthy administration of entitlements,” he instructed CNBC in March of final yr.
And that’s precisely how Trump and his allies are framing their potential assaults on Medicaid now. (Not like USAID, Medicaid is practically 10 p.c of the federal price range, making it a extra interesting goal for the Trump administration in the event that they’re seeking to drastically lower spending.) He not too long ago instructed reporters that he’ll “love and cherish” Medicaid, however added one caveat: “We’re not going to do something with that,” he mentioned, “until we are able to discover some abuse or waste.”
Positive sufficient, when Trump nominated Dr. Mehmet Oz to function the administrator of the Facilities for Medicare and Medicaid Providers (CMS), he mentioned that Oz would “lower waste and fraud inside our nation’s costliest authorities company.” And earlier this month, Musk’s DOGE aides began working at CMS, the place, in accordance with the Wall Avenue Journal, they’ve gained entry to important fee and contracting programs. The DOGE aides have been tasked with discovering fraud.
To make sure, Medicaid and Medicare, like every authorities program, are not at all excellent and do expertise fraud and mismanagement. However the Trump administration is enormously exaggerating how a lot cash they may save by tackling fraud in these applications. “At this level, I’m 100% sure that the magnitude of the fraud in federal entitlements (Social Safety, Medicare, Medicaid, Welfare, Incapacity, and so forth) exceeds the mixed sum of each personal rip-off you’ve ever heard by FAR,” Musk tweeted final week. “It’s not even shut.”
That declare, nonetheless, isn’t rooted in actuality, until Musk is aware of one thing we don’t and isn’t sharing it. One quantity that the federal government usually cites when evaluating these applications’ effectivity is the “improper fee price,” which represents funds that don’t meet CMS necessities for numerous causes, together with inadequate documentation, overpaying, or underpaying. In 2024, Medicaid’s improper fee price was roughly 5 p.c. Whereas a few of that is likely to be a results of fraud, abuse, or mismanagement, the overwhelming majority of it’s a results of inadequate documentation, in accordance with a CMS report.
The issue is that if Republicans are really involved with wasteful spending, they wouldn’t focus their efforts on proscribing welfare entry by imposing measures like work necessities, which have been confirmed to be ineffective. When Georgia imposed its work necessities on Medicaid, for instance, its administrative prices ballooned, with the vast majority of its Medicaid spending going towards implementing its work reporting necessities.
Republican efforts to reduce Medicaid and different welfare applications have by no means been about stopping fraud or abuse. They’ve at all times been about shrinking the social security internet, partially to assist fund tax cuts for individuals who don’t want them. And with Musk’s plan to chop some $2 trillion in authorities spending, it’s clear the highway to getting even remotely near that determine goes by entitlement cuts. Just like the assault on USAID, Republicans will say they’re merely concentrating on fraud and abuse, however their definition of wasteful spending will doubtless have much less to do with precise waste or corruption and extra to do with cash that goes towards serving to the poor.
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