Thomas Schatz, president of Citizens Against Government Waste, details how his organization saved $2.3 trillion since 1984 following the GRACE Commission report. He highlights Vice President Vance's "war on fraud," noting $130 billion in improper payments for fiscal year 2025 and systemic failures like unshared Social Security death files. The discussion critiques California's high-speed rail, Pentagon spending audits, and the Center for Medicare and Medicaid Innovation's $5.4 billion loss, arguing that eliminating such programs is essential to curb federal waste and restore fiscal integrity. [Automatically generated summary]
The organization was created in 1984 following the report of the GRACE Commission under President Reagan.
The Grace Commission spent a year and a half, 161 corporate executives, worked with the members of the executive branch and came up with those recommendations, which would have saved $424.4 billion over three years.
We've managed to save about $2.3 trillion since then.
It was worth a lot more before the budget got so big.
But the organization is supported by anybody who wants to support us, basically individuals and others who care about wasteful spending.
I think anything that can be done to reduce the amount of waste, fraud, abuse, and mismanagement is great.
And there are a lot of recommendations in there that groups like Citizens Against Government Waste, the Government Accountability Office, the offices of inspectors general have been talking about for years, which is to overall make sure that money is not being sent to people who shouldn't get it.
It's simple.
In the private sector, they have internal controls that prevent that kind of spending from occurring.
If they didn't, they'd probably go out of business.
But you really can't, if you're a business, you're not going to pay someone who didn't do the work that you hired them for.
And it's just a simple concept.
It's a management question, keeping track of the money, making sure that it's being spent as intended.
And then there are lists of companies on what's called the do-not-pay list.
They shouldn't get money from any agency.
There's the Social Security death file, which until recently, Senator Kennedy had the bill to make this idea permanent.
Social Security was not sharing people who were deceased with the Department of the Treasury to make sure they weren't getting money.
I think we've been around, oh, 250 years, and this year is the first time it's been legislation to do that.
Someone who intentionally takes money against the law.
Waste, in our view, is money that is being spent that is not going to what either the agency or Congress intended within the confines of a statute or a regulation.
And mismanagement is Not tracking how the money is being spent and making sure before it goes out that the people or the organizations who are getting the money are following through and completing whatever the task might be.
When we first started talking about this problem, the President made it very clear he wanted us to take the fraud problem seriously because nobody had until he was president.
We started to figure out one big hole that existed is that the agencies of the government weren't actually talking to each other.
So Treasury would have evidence of financial fraud, but wasn't talking to the Department of Justice about it.
Health and Human Services had evidence of Medicaid fraud, but wasn't talking to the Department of Treasury about it.
So what this executive order does is force the entire apparatus of the federal government to do two things.
Stop the fraud on the American taxpayer and make sure that the benefits that ought by right go to American citizens go to American citizens and not to fraudsters.
It's essential that the agencies talk to each other and provide information about people who are defrauding them to other agencies.
It's a pretty big government.
And again, inside a company, that is likely to occur.
Certainly a small business would be able to figure out who's getting money and who's defrauding them.
One of the problems is the incompatible accounting and computer systems that agencies have, that they will not upgrade, that they won't make them work together.
There are a lot of examples of that.
Health records from the VA and the Department of Defense, they've been trying to combine that for years and trying to make it simple.
If you are in the Army or the Navy and then you become a veteran, your record should go like that to the Department of Veterans Affairs, but that doesn't happen.
So interoperability is a big deal.
And without information, which is underpinning everything, it is impossible to determine if somebody has or is likely to defraud a federal agency.
So this is a good idea.
It's a question of getting the systems in place to be able to literally look at a list that has everybody in one place.
But that's never been done.
And agencies tend to be a little protective of their systems.
Well, that has been reported that there's been extensive fraud in Medicaid in Minnesota.
It's likely in other states as well.
I think they have probably more evidence there than anywhere else.
And of course, doing this should be based on the evidence, not on anything related to politics or not liking somebody.
I'm not saying that's the case here.
I'm just saying generally the fact should be that there has been sufficient fraud in Medicaid in Minnesota that they have to stop everything and reassess how the money is being sent and how it's being spent.
And really that should be done across a number of programs and agencies.
Improper payments, which the Government Accountability Office reports on every year, was about $130 billion in fiscal year 2025.
And the GAO said that since 2003, that total is $2.8 trillion.
Now, again, not all improper payments are payments that are going to people who are ineligible.
Some of them are overpayments, but most of them are payments that should not have been sent in the first place.
And NGAO said there's between $250 and $500 billion in fraud.
Again, back to fraud.
And so this is, there's a lot of good information about what's gone wrong.
It's a question of trying to get it right.
And that's, I think, with the task force and other efforts being made.
Senator Joni Ernst at a hearing last week introduced legislation to require cost transparency.
Well, a lot of states don't have sufficient anti-fraud systems in place.
Again, we're back to computer systems.
Funny, we talk about artificial intelligence, but some of the programs, the software systems and the hardware systems and federal and state agencies, some go back to the 60s and you can't find anybody that knows COBOL anymore.
Probably people listening have no idea what that is for the most part, unless you're of a certain age.
But you can't find people to program the systems.
So there's a lack of upgrade.
There's a lack of interoperability, as I've said before.
If the federal and state systems were operating the same way with the same information, somebody gets money from a grant and the state knows who it is, they can then see is that person getting it?
Are they doing what they're supposed to do?
Is it being wasted or stolen?
They just don't have enough of those systems in place.
Doesn't mean that it's an excuse, but they could do a lot more to get better control.
All right, let's talk to internal controls, it's a big deal.
We have this thing that we're called a high-speed railway that the government has been spending billions of dollars on, and I don't know how many years.
And we don't even have track laid yet.
Back during COVID, California had almost a trillion-dollar surplus.
Now we're in a deficit.
And down in Los Angeles, they were auditing the homeless money that went during COVID, and they couldn't find $500 million.
Now, you can call it waste fraud or abuse, but in my opinion, Tom, that's all criminal.
How can you lose $500 million and not be accountable for it?
So I'm not a Trump fan at all, but shaking up this fraud in the government and all this stuff, somebody needs to take a look at that.
I would like Ms. Schatz to discuss maybe for 30 seconds or a minute the federal false claims statute.
And I'd like to make a suggestion.
In every government office, on every elevator, in every break room, at every time clock, promulgate the false claims statute and then change the name from false claims statute to whistle blower awards statute and watch the fraud that will be exposed.
Right, false claims act is called the Keith Ham Act.
And what the False Claims Act does is if you, as an individual or government employee, bring an example of fraud, criminal activity to the federal government, you get a percentage of the amount of money that's recovered.
I don't recall off the top of my head how much it is, maybe 10% or so, or maybe a little more.
But that we, by the way, we've suggested, Citizens Against Government Waste has suggested over the years that there should be some kind of bonus system for federal employees who identify and expose and eliminate fraud just internally.
It has nothing to do with the False Claims Act, just as part of their job.
And the agency gets to keep the savings.
So that's also an incentive.
The KTAM is a much more limited statute.
It requires bringing a lawsuit.
It requires going to court.
So it takes a lot longer.
There are much bigger cases.
But simply, hey, you know, there's too many paperclips in this agency.
Well, the Grace Commission, where I mentioned the 2,478 recommendations and $424.4 billion in savings, about a quarter of those savings came from the Pentagon.
And really the issue with the Pentagon is that every penny that is wasted is a penny that's not going to the warfighters and not helping to protect the national security of the United States.
So we have been as an organization pointing out waste in Pentagon spending for many, many years, especially earmarks.
We've done a lot of writing about the F-35.
And so we've been the second engine for the F-35 as well.
So there's a lot out there on the Pentagon.
We do wish that they would do a better job of eliminating the waste, making it more efficient, because that would help everyone.
And of course, the Pentagon is the only agency that has not completed a clean federal audit since every agency, every other agency has done so.
Only the Marines have done that inside of the Pentagon.
Cecilia, Birmingham, Alabama, line for Democrats, you're on the air.
unidentified
Yes, I wanted to mention there is a lot of fraud and abuse, but still, this president has got rid of a lot of checks and balances by firing different departments.
So how are you going to find out more fraud and abuse if you keep firing the federal employees in different agencies?
See, you have to maintain the system of some kind of checks and balances.
And that's being lost in this current administration here.
And, you know, and one more thing, you don't punish people that need certain programs.
They need like Medicaid, Medicare, these programs that are helping the poor.
Because if there is fraud and abuse, let's weed that out.
But don't punish, on the other hand, don't punish the population from certain vital programs that people need.
Linwood, College Park, Maryland, Independent Line, you're on with Tom Schatz.
unidentified
Good morning, Mr. Schatz.
I'm calling in particular in regards to an independent executive federal agency out of Washington, D.C., in the law enforcement capacity.
It's called Court Services and Offender Supervision Agency.
And there, I was a supervisor there, and it was riddled with fraud.
Matter of fact, I had an employee that fraudulently used the government credit card over 64 times.
I proposed her termination, and rather than them terminate her, they terminated me.
Likewise, I had a peer, high-profile murder cases, and they give the person employee of the year and bonuses.
And what you said is exactly correct.
You can provide bonuses, et cetera, et cetera.
But that was basically bribe and hush money.
And I was a whistleblower.
I was retaliated against, and et cetera.
And I exhausted my rights.
However, I think there should be an investigation into that agency.
It's under the White House, so it's in Mr. Trump's front yard.
As a matter of fact, it's on his porch.
And it is, I can't speak for the entire federal government, but I can say that I've seen a great deal of fraud and abuse and waste coming from that particular agency.
I was unaware of that agency's activities, and I'm sorry that this all happened to you.
And it's not atypical for people who report fraud to be retaliated against, because if you report fraud and the agency gets less money, that means fewer employees.
I know that sounds weird, but that is kind of the thinking in many of the agencies.
Well, we need to have this money to do our job.
And of course, the budget itself is based on what agency spent in the prior year, not how well they're doing.
It's called the baseline budgeting.
So if you have an amount of money in one year, that's the baseline for the next year.
You don't have to prove they did a great job with it.
You just say, here's what we spent, give us the same reward.
Again, that's a systemic problem throughout the government.
And there are a number of members of Congress who are trying to help the whistleblowers and avoid these kinds of things that have happened to the caller.
So in any organization, you can easily find 10% to 15% of kind of fat or waste or whatever you want to call it, a way to make the whole thing more efficient.
And so when you say a trillion in wasteful spending or inefficiency or mismanagement, it's not an unreasonable number.
So, we are just one organization of really maybe two handfuls.
There are not a lot of groups like Citizens Against Government Waste that are focused on wasteful spending.
Pretty much everybody else here in Washington is focused on getting money from the government.
So, we do a lot of work in coalitions.
We have sent letters to Congress with up to 50 or 60 organizations on various issues.
We testify.
I've testified.
My colleague, Vice President, has testified as well.
Sometimes we go out to the states, which our health and science policy director did last week in Tennessee.
So, we are as much as we can do.
We're only 10 people.
It's not a big organization.
And so, we really try to work hard with other groups to make sure that the executive branch and Congress hears what we're saying.
And then, we rate the votes of members of Congress through a lobbying arm called the Council for Citizens Against Government Waste.
So, members of Congress are aware of what we think, and we are having somewhat of an impact.
But it's a we're doing, you know, as I said, it's a matter of resources and fighting against much, much more organized and literally organizations with a lot more money to push through what they want.
I'm going to find out what a citizen does at the county level when the county caseworkers have been alerted, notified, given proof of fraud that was charged to my insurance, and they say, Oh, well, we'll investigate.
We'll put together a graph and see if your timing is right and if, you know, what.
And then they just say, Well, we're not going to investigate that.
We don't care.
County Level Investigations00:03:15
unidentified
What do you care?
Because it's not your money, it's the insurance.
So, what do you care?
And I'm like, It's fraud.
But at the county level, they won't do anything.
So, I don't know what to do.
I've been fighting it for over two years, and I don't know where to go next.
I always suggest that people go and talk to the local officials and make their case.
There are a lot of open meetings, a lot of opportunities.
Write to your member of Congress.
They have caseworkers in congressional offices who may also be willing to help, especially if you say that somebody locally is not doing what they're doing, supposed to do to help you.
I've seen you on here on and off for many, many years.
We in New York are worried about two big projects we know are already wasteful.
That Second Avenue subway extension, which has been going on for probably 30 years, and the high-speed rail going up the west side of the Hudson, which they're talking about, but they're moving so slowly.
I know they've been having trouble buying people out or whatever, but the west side Hudson just seems to be taking forever.
I mean, the one that's a high-speed rail, like between New York City and Albany.
I was wondering if you could comment on that.
And the Second Avenue subway extension, which has taken apparently billions and billions at a half a mile, half a mile apiece to move it.
Sandra, New Haven, Indiana, Republican, you're on with Tom Schatz.
unidentified
Good morning.
I seem to remember years ago when the Constitution was written, they said that they've given us this constitutional republic if we can keep it, but it has to be done by a moral people.
If you're not a moral person, then you're not going to be able to hold this.
And I think that's part of what's happening.
If you look around at all the looting in the ceiling and people don't care, and they just, I saw a video the other day, they put up a FedEx truck that stopped to make a stop.
And 25 people climbed in the back and just took everything, you know.
Strengthening National Morality00:03:16
unidentified
So what we need to do is do something to strengthen the morality of our country.
But what I really called about was things like this.
Here's a story today by Lowell Caulfield.
And it says, broad report: 89 hospice companies are located in one Los Angeles office building.
Now, you know, how can you just look at something like that and know that that's not broad?
And that's why we need this birthright citizenship change.
For example, here's another one by Becky Noble.
Give us your tired, you're poor, your freebies.
Nearly half of U.S. immigrant households are on welfare because their children become citizens.
And then the entire household can be funded by welfare.
And this is the main problem.
Here is a U.S. citizen is taking the helm of Mexico's fiercest cartel, exposing the ugly truth on birthright citizenship.
So the F-35 is a long story, but it's not a good story.
The F-35, it's being used, but it's not successful in any way.
They're kind of moving on to the next generation of fighters at this point.
But it was one of the most expensive weapons programs in history, and they have had a lot of problems with grounding them, with not being able to use them.
So it's a good chapter to read in Climb Cuts to get all the details.
If you're in an office and you have all this money out there and you're wondering what I can do with it all, you start thinking about how I give this guy a pay raise or whatever.
So, and that's a part of fraud.
But I think if you're in charge and you tell your other offices to check to find out if you can find any fraud, and if you do find any fraud, just write me a memo.
I think it's a matter of whether the agencies are taking it seriously.
Again, I think the fraud task force that President Trump would take Vice President Vance in charge of is trying to do more to have interagency cooperation, better interoperability of their computer and the county system so they know who's not eligible to receive money.
Many times you see someone who goes to the SBA and doesn't get a loan, goes to the Department of Agriculture, who unfortunately has the same kind of loan, and they get the loan.
So, yes, I seem to recall that the president at one point was looking into the Fed and to the Treasury to see how much gold we actually had left.
And the Fed chair was just done in a news report stating that he was proud of the fact that the Fed was an independent organization controlling all the central banks.
Well, some people would feel otherwise, myself included, because you have a bunch of families, Rockefellers, Rothschilds, all maintaining super wealth from control of our banking and treasury systems.
What about that fraud?
That's a huge fraud in 1940 against the American people.
He is the Global Director of Research at the organization More in Common, and he's here to talk about a really interesting study into President Trump's GOP coalition and the reaction to the war in Iran.