Fraud-focused bills passed by House follow ‘DOGE playbook,’ privacy experts warn

The House passed two bills this week that Republicans say will prevent fraud in federal programs by identifying suspicious activity, stopping payments and creating a new Treasury Department-based inspector general to fight malfeasance across the government. 

Democratic lawmakers and privacy advocates, however, see an excessively sweeping, bad-faith effort that could expose individuals’ data and prevent scores of Americans from receiving benefits to which they’re entitled.

The Fraud Prevention and Accountability Act from Reps. Pete Sessions, R-Texas, and William Timmons, R-S.C., cleared the House on Wednesday by a 240-181 margin, with 28 Democrats joining 211 Republicans in favor of the bill. 

The Stopping Fraudulent Payments Act from Reps. James Comer, R-Ky., Jodey Arrington, R-Texas, and Ken Calvert, R-Calif., was more contested, with just six Democrats crossing over in a 218-200 tally.

Comer, who chairs the House Oversight Committee, said those pieces of legislation and nine other fraud-related bills that passed the chamber this week represent “long overdue” reforms in governmentwide fraud prevention. 

“They will safeguard our constituents’ tax dollars and ensure federal programs deliver for citizens who need them the most, as Congress intended,” he added.

For privacy experts, while preventing fraud in federal programs is an obvious goal that all parties can get behind, the devil is in the details. 

“Big picture, the concerns that [we have] about these two bills is that they would significantly threaten people’s privacy by expanding the kinds of data held in the Department of Treasury’s Do Not Pay system, and the way that that information can be used,” said Quinn Anex-Ries, senior policy analyst on the Center for Democracy & Technology’s Equity in Civic Technology team.

“The risks are pretty high here,” he added, “and the current drafts of the bills don’t do enough to address those risks, mitigate privacy, and put proper parameters around how [inadvertent benefits cut-offs] can happen.”

Data-sharing worries amid silo crackdowns

The first bill (H.R. 8312) would create a governmentwide data analytics function to aid agency inspectors general with their fraud fighting, using resources built by the Pandemic Response Accountability Committee and program integrity and improper payment tools managed by Treasury’s Bureau of Fiscal Service. It would also establish a new, permanent IG position within Treasury called the Office for Fraud, Accountability, and Recovery.

Sessions, who used a chunk of his time on the House floor to bash the Biden administration over fraud in pandemic relief programs, said the Fraud Prevention and Accountability Act will allow the PRAC to “continue permanently” as part of the un-siloed data-sharing resource. And the new Treasury watchdog will coordinate and police from there.

“They are professionals, they are law enforcement, and they have an eye to fraud,” the Texas Republican said of the new IG post.

Rep. James Walkinshaw of Virginia said he and his Democratic colleagues on the House Oversight Committee support making the PRAC permanent, but the new IG office continues a Trump administration war on independent watchdogs since it will live outside the Council of the Inspectors General for Integrity and Efficiency and potentially be stocked “with political cronies.”

“This bill would put the IG overseeing the payment infrastructure inside the very agency that runs that payment infrastructure,” Walkinshaw said. “I think that weakens it.”

The payment infrastructure — and co-mingling of hundreds of data assets and information resources — is of particular interest to Abigail Kunkler, a law fellow at the Electronic Privacy Information Center focused on surveillance oversight.

Creating national consolidated data banks of this kind is something Congress has previously “rejected in other contexts,” Kunkler said, and could run the risk of Privacy Act violations if the resource is breached. The Trump administration has pushed for the breakdown of federal data silos — and run into legal issues with various data-sharing pushes across agencies.

“This is the DOGE playbook, disregarding walls that were put up for a reason and consolidating information in order to use that as a cudgel,” she said. People are “not going to be made aware that their information will be used to continuously surveil them.”   

A CDT paper published last year found that federal data consolidation in other countries resulted in data mismatches that ended up wrongly denying public benefits to individuals, and instances of data being used for purposes other than stated intents. 

Fraud risk indicators, ‘anomalous definitions’ 

The second bill (H.R. 8464) would require agencies to engage in various fraud-prevention activities before issuing payments to benefits programs. The Stopping Fraudulent Payments Act also grants the Treasury Department the authority to halt or return payments if it determines that there is an “elevated risk of fraud,” Comer said.

Rep. Lauren Boebert, R-Colo., said the bill cuts against a “Washington bureaucracy” that has “operated like an open checkbook for fraudsters. They cut the checks first, ask the questions later, while American taxpayers foot the bill for waste, abuse, and outright theft. We’ve seen it in state-administered social services, where millions vanished into pockets of criminals.”

The legislation appears to offer broad leeway to the enforcers of these rules, via the use of what the bill calls a “fraud risk indicator.” 

That term is defined in the bill as “an objective data point or analytic signal that indicates an anomalous payment pattern or increase in the volume of a payment amount, a verified data mismatch, network or behavioral anomaly, or match identified by the Do Not Pay system under section 3354 and any payment, account, or payee validation program or service administered by the Secretary that would result in financial loss to the Government.” 

Democrats and privacy advocates fear that the “objective data point” isn’t clearly defined and could be weaponized by the administration to go after programs it doesn’t like. 

Rep. Wesley Bell, D-Mo., said the legislation uses “fraud as a pretext” to allow the president to “target states that disagree with him.” And the people who would “bear the brunt” of payment pauses would be “patients on Medicaid, our seniors on Social Security, working families relying on SNAP, some of the most marginalized of our brothers and sisters.”

Walkinshaw, meanwhile, warned that the bill “does not constitute a good-faith effort to detect and prevent fraud” because it “would give the Trump administration a blank check to cut off entitlements and grants to any entity it disfavors, or individual, with few guardrails.” 

Kunkler echoed those worries, noting that the Trump administration has already punished states with stop-payments for “not falling in line,” pointing specifically to Minnesota and California. And how the bill defines fraud risk indicators, she said, is “very broad.”

“You could drive a truck through that,” Kunkler continued. “I think that’s part and parcel to having these large anomalous definitions that people can kind of bend to their whims, right?”

Anex-Ries similarly flagged the “huge risk of political weaponization of federal payments” that the bill could usher in. The potential for inadvertent errors is also unnecessarily high.

“Even if someone in the administration did this with good intention, you open up a lot more risk that you’re just going to have inaccurate predictions of fraud,” Anex-Ries said, meaning “people aren’t going to get the benefits that they deserve, and are legally entitled to.”

What’s next?

With the Fraud Prevention and Accountability Act and the Stopping Fraudulent Payments Act having now cleared the House, all eyes now turn to the Senate. A bill introduced Wednesday in the upper chamber by Sen. Joni Ernst, R-Iowa, appears to be a companion to the latter, though bill text hadn’t been posted as of publication time.

Anex-Ries said the fact that “very few” House Democrats voted in favor of either bill should send a message to their Senate colleagues that “this is not a resolved issue.” 

“These bills are imperfect and need a lot more work and rethinking to be done in a way that both addresses fraud while adequately protecting people’s information,” he said.