One of many first casualties of the second Trump administration has been the US Company for Worldwide Improvement (USAID).
The company, which funds and operates humanitarian help packages all the world over, has rapidly turn out to be a goal for Republicans. Over the previous 4 weeks, the White Home has been pursuing a plan to cut back USAID’s workforce from over 10,000 folks to only about 290. The trouble has gone to date that, in Washington, DC, indicators for the company have both been coated in black tape or eliminated completely.
There are many explanation why the Trump administration — and Elon Musk’s so-called Division of Authorities Effectivity (DOGE) — could be so fixated on USAID particularly. It may very well be a part of their effort to dramatically scale back federal spending, utilizing USAID as a trial run earlier than dismantling different authorities businesses. Or it may very well be that Trump and his allies see little worth in overseas help. 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 12 months, USAID spent lower than 1 p.c of the federal finances.
However the Trump administration’s assault on USAID does inform us one thing broader about Republicans’ view on authorities spending — particularly, what they could contemplate to be wasteful spending: packages that assist the poor. And the best way they’ve justified the dismantling of USAID — by categorizing it as rife with fraud and mismanagement — could give us a glimpse into how they are going to method home welfare packages.
A press release from the White Home earlier this month lamented that USAID has, apparently, “been unaccountable to taxpayers because it funnels huge sums of cash to the ridiculous — and, in lots of instances, malicious — pet initiatives of entrenched bureaucrats.”
It doesn’t matter that the billions of {dollars} that USAID spends have supported life-saving meals distribution and STD-prevention packages. And it doesn’t matter that USAID’s famine warning system helps organizations world wide decide the place to deploy humanitarian reduction. What issues to Trump and his allies are the tales — a few of which, it must be famous, aren’t even true — that assist their argument that primary humanitarian help packages are riddled with waste and abuse.
Successfully shutting down USAID may have main penalties for thousands and thousands of individuals overseas, and it also needs to function a warning for individuals who care about antipoverty packages right here at house. When packages like meals stamps or Medicaid are on the chopping block, likelihood is Republicans are going to show to the identical argument: These packages 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 reduce packages 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 12 months.
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 finances, making it a extra interesting goal for the Trump administration in the event that they’re trying to drastically reduce 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, “except we will discover some abuse or waste.”
Positive sufficient, when Trump nominated Dr. Mehmet Oz to function the administrator of the Facilities for Medicare and Medicaid Companies (CMS), he mentioned that Oz would “reduce waste and fraud inside our nation’s most costly authorities company.” And earlier this month, Musk’s DOGE aides began working at CMS, the place, based on the Wall Road Journal, they’ve gained entry to crucial fee and contracting programs. The DOGE aides have been tasked with discovering fraud.
To make sure, Medicaid and Medicare, like all authorities program, are not at all excellent and do expertise fraud and mismanagement. However the Trump administration is vastly exaggerating how a lot cash they are going to save by tackling fraud in these packages. “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, except 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 packages’ effectivity is the “improper fee charge,” 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 charge was roughly 5 p.c. Whereas a few of that could be a results of fraud, abuse, or mismanagement, the overwhelming majority of it’s a results of inadequate documentation, based on 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 nearly all of its Medicaid spending going towards implementing its work reporting necessities.
Republican efforts to reduce Medicaid and different welfare packages have by no means been about stopping fraud or abuse. They’ve at all times been about shrinking the social security web, partly 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 street to getting even remotely near that determine goes by way of entitlement cuts. Just like the assault on USAID, Republicans will say they’re merely focusing on fraud and abuse, however their definition of wasteful spending will probably have much less to do with precise waste or corruption and extra to do with cash that goes towards serving to the poor.
This story was featured within the Inside Our Means publication. Enroll right here.