UPDATE 12.26.25: In response to massive social services fraud in Minnesota under the administration of Gov. Tim Walz, SBA Administrator Kelly Loeffler has announced that the Trump administration will halt support to the state “until further notice.” Charles Creitz reports in Fox News:

The move comes as Walz and his administration grapple with billions of dollars in social services fraud. U.S. Attorney Joseph Thompson said Thursday a “significant amount” of $18 billion worth of Medicaid funding was likely lost to fraud.

“I am notifying you that effective immediately and until further notice, the SBA is halting the disbursement of federal funds to SBA resource partners operating in the state of Minnesota, totaling over $5.5 million in annual support,” Loeffler wrote Walz on Tuesday.

“This action is the result of a fundamental breakdown in the public trust. Under your leadership, Minnesota failed to safeguard taxpayer dollars, and SBA will not continue to place federal resources at risk in a state where oversight measures are ignored and accountability is abandoned.”

Loeffler blamed Walz for making the Land of 10,000 Lakes the “epicenter” of the largest fraud scandal of the COVID-19 pandemic era, and that recent criminal convictions of Somalis and other figures prove such fraud is “endemic” to St. Paul’s vast welfare curriculum.

Originally posted December 8, 2025.

Staggering Lack of Scrutiny on Governor Tim Walz’s Watch 

Why won’t Democrats acknowledge fraud? One reason is that the Minnesota Medicaid grift shows how easily it can become an inducement for fraud. Our country seems to be at a tipping point with paralyzing commitment to woke ideology, mass migration, stupefying debt, and cratering cultural self-confidence. Minnesota is the poster child for an out-of-control level of corruption and incompetence rampant in the state’s government.

Reports from the NYT, which has now legitimized the fraud, highlight how the Biden Administration’s Medicaid waivers let states use federal funds to pay for housing, food, transportation, sports fees, and even Native American herbal remedies and exorcisms. The Biden administration also wanted to allow states to spend more federal dollars on social services without appropriation of the money from Congress.

Medicaid spending, like Medicare and Social Security, runs on autopilot. Most states receive between one and nine dollars for every one they spend on the program. The Biden administration wanted states to use federal funds to pay for food, transportation, and sports fees. It also wanted to give states more federal dollars to spend on social services, without Congress appropriating funds.

Like Medicare and Social Security spending, Medicaid runs on autopilot. Most states receive between one and nine federal dollars for every one they spend on the program. This large federal match is also a large disincentive to police fraud. How much more hasn’t been uncovered because nobody looked?

Minnesota, Poster Child for What Is Wrong with Welfare

Democrats blame the mess in Minnesota on the rush to distribute Covid relief. Doubtful, writes Francis Menton. In the Manhattan Contrarian, he reports that this year, Federal and state prosecutors in New York have charged dozens of companies for fraudulently billing Medicaid for driving beneficiaries to appointments that never occurred or for inflating. Donald Trump has been highlighting that the alleged Minnesota scammers are ethnic Somalis. Minnesota’s generous welfare state has become a magnet for Somali immigrants.

The main problem here isn’t ethnicity or migration, however.

The incentives for indolence and fraud are at the heart of the welfare state. All that free money with few guardrails is an invitation to theft.

Democrats opposed the GOP tax bill that would have made modest reforms to reduce fraud, such as requiring states 1. to verify Medicaid eligibility twice a year and 2. To put states on the hook for a share of improper food-stamp payments. Democrats opposed both, however, calling them cruel.

Democrats won’t acknowledge fraud because they want more Americans on the dole.

Welfare is central to their political business model. Republicans who make this scandal about immigration are missing the point—and missing an opportunity to educate Americans about the entitlement state grift.