Vice President JD Vance said the federal government’s effort to identify fraud in major benefit programs is being hampered by states that are unwilling to cooperate with eligibility reviews, pointing specifically to California, Illinois and New York.

Vance argued that some of the largest potential fraud problems are concentrated in states where officials have resisted federal efforts to verify who is receiving taxpayer-funded benefits.

The Trump administration has established a federal task force focused on fraud in programs including Medicaid and SNAP, with California, Illinois and New York among the states it has identified as areas of concern.

“The biggest problem with finding fraud is is actually that the states where it's worst are also the states that have the least willingness to cooperate with what we're doing,” Vance said.

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He pointed first to Medicare-related fraud in California, alleging that federal money can flow to beneficiaries or identities that should never have qualified.

“So when you look at some of the bigger-ticket items for fraud, you know, you're looking at Medicare fraud in California,” Vance said.

“People who are illegal, people who aren't even like human beings, they're just like a a completely made-up, you know, shell of a person.”

Vance said the federal government’s efforts become more difficult when state governments refuse to assist with verifying eligibility.

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“But but unfortunately, the the state of California is not actually helping us fight back against that particular fraud,” Vance said.

He also alleged that large numbers of illegal immigrants in California, Illinois and New York are enrolled in Medicaid, resulting in substantial federal spending.

“Or we know that there are hundreds of thousands, maybe more, illegal aliens in Illinois, New York, and California who are on Medicaid,” Vance said.

“That obviously is billions and billions of dollars to provide healthcare to those people.”

Vance said he views the largest fraud risks as concentrated in major federal programs administered through states that have experienced high levels of illegal immigration.

“So the the the basic fraud that exists is the big programs in states that have allowed themselves to be overrun by illegal immigration,” he said.

The vice president also focused on the Supplemental Nutrition Assistance Program, commonly known as SNAP or food stamps.

He said the way federal funds are transferred to states left him surprised when the administration began examining the system.

“Another very good example, and this was shocking to me when we came in and started doing this work, is the way the SNAP program This is the food stamp program that ensures that low-income Americans have access to food that they need,” Vance said.

He emphasized that the program serves an important purpose for low-income families.

“Obviously, one of the most important things that we do in the federal government is make sure that, you know, poor kids can eat,” Vance said.

Vance nevertheless argued that SNAP contains substantial vulnerabilities because of how states bill the federal government.

“But that program is rife with fraud, in part because the way it works is, you know, California bills us once a month for the cost of their SNAP program, at $7 or $8 or $9 billion, depending on the month that we're talking about,” Vance said.

He said the federal government can transfer billions of dollars to California without having enough information to independently verify every recipient.

“So what happens is the federal government wires $9 billion to California, no questions asked,” Vance said.

“So it's not an exaggeration to say that we have no ability to know who is even on the SNAP program, whether they're a real human being, whether they're a legal resident of the United States of America.”

Vance said the administration has asked large Democratic-led states to cooperate with basic eligibility reviews but has encountered resistance.

“And when we go to the big blue states and say, Why don't you help us just confirm basic eligibility? we get totally pushback,” Vance said.

“We we get no cooperation on this basic fact of good governance, confirming eligibility for federal programs.”

He estimated that if total fraud reaches $700 billion, several hundred billion dollars could potentially be concentrated in blue states and addressed through stronger eligibility verification.

“So my guess is that if the number is $700 billion, a few hundred billion of that is in the blue states and we could deal with it just by checking eligibility criteria,” Vance said.

Vance concluded by saying the administration is looking for ways to compel greater state cooperation, but legal barriers have made that more difficult.

“We're working on innovative ways to force that, but it's actually legally much harder than it should be to force the blue states to comply with some basic anti-fraud initiatives.”

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