If we’re serious about reducing federal spending, we need to begin where the waste is—not where the services are. For me, that means starting with fraud, waste, abuse, and error in Medicare and Medicaid.

Each year, these programs account for an estimated $100 billion in improper payments. That includes clear fraud, like phantom providers and stolen identities—but also unnecessary services, documentation failures, and outright billing errors.

We currently detect about $50–60 billion of it, and only $3–6 billion is recovered. The rest is gone.

With better tools—especially real-time analytics and smarter detection systems—we could reasonably detect $80–90 billion of the total. And if we can detect it before payment, we don’t have to chase it after the fact.

But here’s the catch: we don’t want to overcorrect and start delaying legitimate care or punishing honest providers. That’s why the goal isn’t immediate denial—it’s smarter triage. Some payments should be blocked. Others should be flagged for quick review. Many just need monitoring.

Even with a cautious, well-calibrated approach, we could prevent $15–30 billion in improper payments each year. Not by cutting services. Not by raising taxes. Just by getting better at stopping the things we should never have paid for in the first place.

That’s what I mean by thoughtful cost cutting:

Start with what’s wasteful. Be smart about how you fix it. And protect what matters most.

This isn’t the only cost-cutting measure I would take—it’s just one of them. But it’s a good place to start.