Trump turns focus from Tehran to U.S. taxpayers, sending Vance after waste and fraud

President Donald Trump on Thursday pulled Vice President JD Vance off the Iran diplomacy track and aimed him at a target the White House has long argued costs Americans more than any foreign conflict: billions in taxpayer dollars allegedly lost to fraud in predominantly Democrat-run states. The GOP-led House Oversight Committee has been holding hearings and publicly sounding Trump's alarm since at least last February.

"Billions of Dollars is being stolen each and every month," Trump wrote on Truth Social, singling out Minnesota, California and Illinois before declaring, "CORRUPTION is in the Democrat Leadership's blood!"

In the same post, Trump said the U.S. should no longer seek a deal with Iran. Vance already chairs the administration's Task Force to Eliminate Fraud, and Trump said his focus would be "EVERYWHERE," but mainly on blue states such as California, Illinois, Minnesota, Maine and New York. 

The directive came just over a week after Republicans suffered major losses in the midterm election.

A task force already in motion

Thursday's order builds on a machine the administration has been assembling for months. Trump's executive order named the vice president as chairman of the task force, with Andrew Ferguson, the Federal Trade Commission chairman, as vice chairman.

The roster reads like a map of federal spending. It includes the departments of Treasury, Justice, Agriculture, Labor, Health and Human Services, Housing and Urban Development, Education, Veterans Affairs and Homeland Security, along with the Small Business Administration and the Office of Management and Budget. The executive order says that some states have opened the door to fraud by letting applicants self-certify eligibility and refusing to share enrollee data with the federal government.

Health care sits at the center of the crackdown. The Trump White House created "The Fraud Ledger," an online public record of the fraud, waste, and corruption identified by the Trump Administration’s Task Force to Eliminate Fraud since January 2025.

Medicaid fraud "Number 1 on the list," university study says

Of the task force's key actions the White House highlighted was Medicaid fraud. Georgetown University's McCourt School of Public Policy reported that "Number 1 on the list is “Medicaid Fraud Deferrals.” Nationwide, $1.4 billion in home health and hospice funding has been suspended, and new Medicare hospice enrollments were halted until controls and accounting improves.

Food aid and child care are the next front. The order cites the Feeding Our Future case, in which a Minnesota nonprofit stole nearly $250 million meant for needy children by billing for meals never served, and says hundreds of millions in federal child care money in Minnesota was stolen by an organized ring. 

That ring was, according to the Associated Press, run by a Somali restaurateur named Salim Said, who operated in Minneapolis. He was accused of vastly overstating the number of meals when seeking government payment for providing food, and prosecutors said he was responsible for $44 million in fraud, some of which was committed by others he recruited.

Minnesota may be the poster child, but the White House doesn't believe it is alone. The order names California, Illinois, New York, Maine and Colorado as states with similar suspected problems.

The administration says the task force has uncovered more than $250 billion in fraud, a figure critics dispute.

Minnesota as the blueprint

If the White House has a case study, it is Minnesota. Federal investigators said roughly $9 billion was funneled out of the state's Medicaid program.

That case shaped the playbook now aimed at other states. Federal Medicaid regulators deferred $350 million in Minnesota payments early this year, then in May issued what they called the largest deferral in agency history: $1.3 billion from California.

The approach has its critics. Georgetown University health policy researchers argue the withheld amounts are not documented fraud, despite how the Fraud Ledger presents them. Minnesota's state auditor has said Washington isn't releasing funds once states comply, though a judge denied Minnesota's request to restore the money, and the appellate process is still unfolding.

Vance has tried to frame the stakes in nonpartisan terms. He has said taxpayers in California and nationwide should be viewed as the real victims.

Pivoting focus from Tehran, Iran to Main Street, USA

The reassignment also reflects a political recalculation. Vance had been speaking almost daily with Iran's mediators, and after the midterms he wrote, "The reason we lost is the war."

Perception of corruption was another issue that broke in Democrats' favor, and Trump's post seeks to flip the script by blaming Democrat-run jurisdictions and their policies for the bulk of corruption.

The move sets up a collision course with the incoming Democratic House majority. Politico noted this week that White House Counsel Will Scharf has already warned that aggressive oversight may cross a line into criminality.

There is precedent for a vice president leading a war on waste. Al Gore was tasked with running the Clinton administration's "Reinventing Government" effort in the 1990s. That project aimed inward at federal bureaucracy, though, while Vance's mandate reaches into the states, where federal dollars change hands.

For a president facing two years of gridlocked — if not divided — government, the bet is simple: Democrats may control the gavels, but Republicans believe the fight over taxpayer money is one they can still win.

Amanda Head is White House Correspondent for Just the News. You can follow her here.