Treasury Secretary Scott Bessent said federal waste, fraud, and abuse cost taxpayers hundreds of billions of dollars annually, citing government estimates that place losses at roughly 10% of the U.S. budget.
By yourNEWS Media Newsroom
Treasury Secretary Scott Bessent said the federal government loses between $300 billion and $600 billion each year to waste, fraud, and abuse, arguing that curbing those losses could significantly strengthen national finances without adding new debt.
Bessent made the remarks in an interview with journalist Christopher Rufo that premiered Sunday, where he pointed to estimates from the Government Accountability Office showing that fraud alone may account for about 10% of the federal budget and roughly 1% to 2% of gross domestic product.
According to Bessent, reducing those losses would free up substantial resources that could be redirected toward national priorities, including defense, without increasing federal borrowing. He referenced President Donald Trump’s push to rebuild the U.S. military following what the administration has described as years of fiscal strain.
“If we can get rid of this waste, fraud, and abuse, we can finance a safer, sounder U.S. … without taking on more debt,” Bessent said in the interview.
The GAO estimates cited by Bessent indicate the federal government likely lost between $233 billion and $521 billion annually to fraud, based on data covering fiscal years 2018 through 2022. In separate analyses, the GAO has also reported that improper payments—a broader category that includes errors and overpayments—have cost taxpayers trillions of dollars over time, underscoring long-standing weaknesses in federal oversight and internal controls.
Bessent also discussed the administration’s Department of Government Efficiency initiative, saying he supports its goal of reducing waste but differs from Elon Musk on execution. While Musk has popularized the Silicon Valley approach of “move fast and break things,” Bessent said his philosophy is “move deliberately and fix things,” emphasizing that Treasury-led investigations will focus on building strong, defensible cases rather than pursuing rapid, high-profile actions.
That approach is increasingly reflected across the administration. During a White House briefing on Thursday, Vice President JD Vance announced the creation of a new assistant attorney general position with nationwide authority dedicated to combating fraud involving taxpayer funds.
Vance’s announcement followed intensified scrutiny of alleged large-scale fraud networks in Minnesota, which has drawn national attention in broader discussions about government accountability. Bessent said the administration intends to use Minnesota as a case study and expand similar enforcement efforts nationwide, warning that federal investigators plan to track misuse of funds across all states.
Beyond spending abuses, the interview also highlighted unpaid taxes as another major strain on federal finances. Internal Revenue Service projections show a net “tax gap” of approximately $606 billion for tax year 2022, representing the difference between taxes owed and those collected on time.
Bessent said the administration’s position is that before pursuing higher taxes or additional borrowing, the federal government should first demonstrate it can reduce losses tied to fraud, mismanagement, and weak enforcement, and then redirect recovered funds toward core government responsibilities.
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