Scott Bessent Estimates How Much Taxpayer Money is Lost to Fraud Each Year
“Tim Walz is a coward. He would not guarantee that the Treasury Secretary … would have police protection in the Minnesota State Capitol.”
During a recent visit to Minnesota, Treasury Secretary Scott Bessent sat down for an interview with journalist Christopher Rufo. When asked about the annual cost of fraud to the federal government, Bessent estimated the figure at between $300 billion and $600 billion — roughly 10% of the U.S. government’s yearly budget.
“That’s not my number, that’s the General Accounting Office,” Bessent said. “So, it’s about 10% of the federal budget, 1 to 2% of GDP.”
“And, if we can narrow that number, President Trump asks for a $500 billion increase in the defense budget to fortify the 10, 20 years of neglect … If we can get rid of this fraud, waste, and abuse, we can finance a safer, sounder U.S. without taking on more debt.”
🚨 HOLY SH!T! Sec. Scott Bessent says as much as 10% of the U.S. budget is fraud — $300-600 BILLION in taxpayer dollars is stolen EVERY YEAR pic.twitter.com/lnDE86ytlr
— Chief Nerd (@TheChiefNerd) January 11, 2026
You may recall that in November, Rufo and Ryan Thorpe, his colleague at The Manhattan Institute, a conservative think tank, published the explosive findings of their investigation into Medicaid fraud in Minnesota in City Journal. The pair uncovered what they described as widespread fraud involving the alleged diversion of millions of dollars in Minnesota taxpayer funds to entities in Somalia.
Since then, additional allegations have surfaced, making the state ground zero for the Trump administration’s broader crackdown on fraud.
As we’ve learned, although Somalis make up only about 1% of Minnesota’s population, a disproportionate share of the fraud in the state allegedly involves this group.
Although it strains credulity, Minnesota Gov. Tim Walz continues to insist he had no knowledge of the rampant fraud that occurred on his watch and has made clear his resentment of the Trump administration’s investigation into his state’s records.
During the interview, Rufo remarked on the change in venue. It had originally been scheduled to take place at the State Capitol building. He then asked Bessent about the reason for the shift.
Growing very animated, Bessent said, “For one reason, Chris. Tim Walz is a coward — is a coward. He would not guarantee that the Treasury Secretary of the United States of America would have police protection in the Minnesota State Capitol. He’s afraid of what is coming.”
Bessent continued, “He’s not going to be able to hide behind this curtain because we will get there. I don’t have to go into the Capitol building to investigate him.
At one point, he recounted to Rufo a story about “one of the Somali fraudsters” who tried to bribe a juror with $120,000 to influence a verdict. It later emerged that she had been given $200,000 and pocketed the remaining $80,000 — proof, as Bessent put it, “It’s like the scorpion, it’s in their nature.”
The Secretary was especially angry over Somalis who are receiving public assistance in the U.S., but still manage to send money back to Somalia. He said, “one of two things must be true. You are getting too much assistance because you have excess funds to feed yourself, your family, food, clothing, or you’ve got stolen money.
“But, in either case, money needs to stay in the U.S., or your benefits need to be cut.”
The full interview can be viewed here.
Taken together, Bessent’s remarks underscore the administration’s broader argument that fraud is not a marginal problem but a systemic one — with real consequences for taxpayers, public trust, and national priorities. Whether the Minnesota cases prove to be isolated or emblematic of a wider pattern — he thinks it’s the latter — the Treasury Secretary made clear that the era of quiet tolerance is over.
As the Trump administration intensifies its crackdown, the central question is no longer whether fraud exists, but how much political will there is to confront it — and how many entrenched interests will resist when the scrutiny turns their way.
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on X or LinkedIn.
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Comments
How about cut the benefits and throw them all in jail. That works for me.
Supposing Little Timmy is stepping down today because Shirley has even more damming take WITH little Timmy threatening “people” with bringing the fraud to public attention
Popcorn
We lose a lot of taxpayer money cracking down on immigration while doing nothing about offshoring. Our entire banking system is run out of India. If India turned hostile, the major banks in the US would be unable to take deposits or clear checks or perform basic banking functions cuz it all happens in Bangalore
Scott Bessent says billions is lot to fraud every year.
Gov Walz says it’s not lost if you know where it went.
“Bessent estimated the figure at between $300 billion and $600 billion…”
As bad as that is – and it is indeed bad – I think the secretary needs a couple more zeros.
I’m of the opinion that the waste, fraud and abuse in the federal government could completely eliminate the need for the income tax if it were eliminated.
“Gov. Tim Walz continues to insist he had no knowledge of the rampant fraud that occurred on his watch”
Amazing how Democrats continue to believe that “I’m not crooked, just stupid” is a winning ploy.
It’s b/c this sort of willful blindness/deliberately obtuse strategy has been successful so often. Add in bad faith interpretation of events and that’s pretty much their media/PR strategy…. beyond Orange Man Bad.
If it is as he claims, that he had no knowledge of rampant fraud, then he ought to resign (or be impeached) due to sheer incompetence.
I expect that’s a low estimate. I also expect that nobody’s going to see the inside of a prison cell for this either.
How is this a story? Every single year since 1980 we have been told the 10 percent fraud estimate. Go fact check me!
Then there’s the fraud at the state and local level. That’s amounts to another couple of points.
There’s simple too much money being taxed and spent. There needs to be a hard cap on total taxation at all levels. That would require a Constitutional amendment.
I think the coward issue was pretty well settled when Ol’ Tim (pretend SGM) bailed on his NG unit on the eve of their deployment.