Draining the swamp of a bloated welfare bureaucracy and enforcing fiscal discipline are monumental tasks — but they are essential for a sustainable future.
I n the United States, public welfare has become an unsustainable financial burden, with expenses soaring to $1.6 trillion annually across various means-tested programs. Medicaid, food stamps, cash assistance, housing support, Supplemental Security Income (SSI), and other initiatives collectively enroll nearly one in three Americans. This sprawling welfare system does not lift individuals out of poverty; instead, it entrenches many of them in dependency. Such an unsustainable structure places an enormous strain on hardworking American families, stifles economic growth, and diverts essential funding from critical services like education and infrastructure. As President Trump embarks on his second term, he must make structural welfare reform an urgent priority. This endeavor demands a dedicated team prepared to confront entrenched inefficiencies head-on.
Medicaid, the largest welfare program, starkly illustrates this dysfunction. It now costs over $835 billion annually. It carries a shocking error rate exceeding 15 percent — equating to nearly $100 billion wasted each year. The program also often funds deceased recipients, highlighting a profound lack of accountability within the system. Designed to promote self-sufficiency, Medicaid’s convoluted rules and policies, exacerbated by the flawed expansion under Obamacare and President Biden’s initiatives to cover housing, food, and other necessities have caused the program to expand beyond control. These issues powerfully underscore the need for improved federal oversight, state flexibility and a commitment to rectify years of mismanagement.
The Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, costs roughly $125 billion per year. Of this amount, fraud accounts for almost 20 percent, imposing an additional burden on taxpayers. Though the program was intended to offer temporary aid to families in need, it has become a widespread dependency, serving many who could otherwise achieve self-sufficiency. When one-fifth of expenditure is compromised by fraud, reform is not just overdue, it’s imperative.
Beyond Medicaid and food stamps, the United States funds more than 60 welfare programs spread across multiple agencies, including cash assistance, housing subsidies, energy assistance, and SSI disability programs. Collectively, these programs consume an astonishing 72.6 percent of unobligated general revenue, swallowing more than 40 percent of some state budgets. This financial drain not only burdens resources but also creates a chaotic web of overlapping services that confuse recipients while driving up redundancy and inefficiency.
A significant driver behind this dysfunction lies in the federal agencies that administer these programs. Multiple departments, including the Department of Health and Human Services (HHS), the Department of Agriculture’s Food and Nutrition Service (FNS), the Social Security Administration, and the Department of Housing and Urban Development (HUD) are responsible for implementing these overlapping welfare programs. The bureaucratic entanglement fosters inefficiency, as each agency operates with its own set of rules and guidelines, creating silos that complicate welfare administration. The Trump administration must take decisive action to consolidate these departments to create a streamlined, cohesive structure. Merging all of the social-welfare sections of HHS, FNS, Social Security, and HUD into a single, much smaller agency focused on efficient welfare delivery and improved oversight is essential.
Transforming the welfare system will take a bold restructuring. One effective approach would be to replace existing federal aid programs with a global block grant system, allowing funding to flow directly to the states from the U.S. Treasury. This reform would eliminate the confusing patchwork of individual funding streams, granting states the flexibility and accountability to customize programs to meet their distinct needs. By implementing capped global block grants, the federal government can both limit spending growth and incentivize states to cut costs, improve quality, drive innovation, and uphold rigorous accountability standards.
Global block grants are a well-researched concept with a proven track record. Past initiatives, including the bipartisan 1996 reform establishing the Temporary Assistance for Needy Families (TANF) program, demonstrate the effectiveness of this approach. Rhode Island’s experience with a global Medicaid waiver in 2009 (which received bipartisan support) showcases the model’s potential. By freeing the state from federal red tape and imposing a funding cap, Rhode Island successfully reduced costs and improved quality, maintaining Medicaid growth at approximately 1 percent — far below the national average.
The current welfare bureaucracy has become a self-perpetuating machine, entrenched in a culture of survival rather than public service. During my time as a state official in Rhode Island, I witnessed this firsthand when federal officials expressed concern over losing their jobs if the state gained more control over Medicaid. This attitude reflects a deeper issue: Welfare agencies are more concerned with sustaining their existence than truly assisting the people they are meant to serve.
By consolidating federal welfare administration and financing under streamlined block grants, the Trump administration could forge a historic partnership with the states to achieve meaningful reform. These grants, tied to performance benchmarks focused on fiscal responsibility, health improvements, and job attainment, would empower states to design programs that move recipients toward greater independence and success. For the first time, the public welfare system would have the opportunity to overcome its greatest challenge: accountability.
Draining the swamp of a bloated welfare bureaucracy and enforcing fiscal discipline are monumental tasks, but they are essential for a sustainable future. If the Trump administration, Congress and the states implement a new social compact, America might just have a chance to restore its republic.