Minnesota Republican says limiting social service fraud is possible. Here’s how.

By HPN staff

On Friday, Jan. 23, a federal judge ruled the U.S. Department of Health and Human Services (HHS) must continue to fund federal child care subsidies and other social service programs in five states where the Trump administration had suspected rampant fraud. 

The funds were frozen following the discovery of billions of dollars in fraud in Minnesota’s childcare system, Medicaid, housing assistance and nutrition programs. The case that made headlines throughout the nation led to increased scrutiny on the state programs.

A Minnesota lawmaker says the fraud at issue has exacerbated a childcare crisis in his state — and that a commitment to limited government could prevent future harm. 

Why it matters

Besides Minnesota, Colorado, Illinois, New York and California were affected by the Jan. 23 ruling. Minnesota state Sen. Jason Miller (R-MN-26) said taxpayers are not the only ones who suffer when fraud exists.

“Uncontrolled fraud has put many families on waiting lists for services, services they justly deserve but have been stolen from them by people trying to enrich themselves,” said State Sen. Jason Miller (R-MN-26). 

Sen. Miller said the fraud also has harmed reputable service providers and their employees.

“[T]the inability of Gov. [Tim] Walz to get fraud under control has led to some dramatic decisions, like shutting down programs completely,” said Sen. Miller. “It’s not just [families who] are waiting for an opening; the rug has been pulled out from under them.”

Miller said this includes many legitimate and reputable service providers who aren’t sure they can make payroll to retain their staff or even stay open if payments are delayed. 

“That again, hurts the people who need these services by exacerbating the shortage of legitimate providers,” he said.

A Federal Reserve Bank of Minneapolis study released last April found 86% of state child care providers said the industry is in “crisis” due to high regulatory, labor, and insurance costs. 

The big picture

While federal lawmakers conducted several oversight hearings in January to examine social service program fraud, state lawmakers have begun to take action as well. 

Ohio Republicans have introduced legislation that would expand the state attorney general’s authority to investigate childcare fraud and would make it easier to stop payments to facilities suspected of fraud. The Republican leader in Michigan’s state Senate has called for an audit of that state’s child care programs.

Miller said returning to the principles of limited government would reduce taxpayers’ exposure to fraud. 

“A stronger commitment to limited government and free-market principles by Gov. Walz and state leaders keeps government smaller and less intrusive, and much less susceptible to fraud,” said Sen. Miller. “These schemes thrived on bloated bureaucracies, excessive handouts, and lax oversight of expansive welfare programs that private charities and market-driven solutions could handle more efficiently and transparently.”

He said prioritizing core state functions, rejecting overreach and empowering families with lower taxes and more of their own money instead of funneling taxpayer dollars through unaccountable middlemen would give far less opportunity for abuse, lower taxes, and restored trust in state government.

Sen. Miller said he and his GOP colleagues will continue to pressure Democrats, who hold the majority in the chamber, to make rooting out waste, fraud, and abuse “a priority this session.”