U.S. Representative Ro Khanna (D-Calif.) speaks to members of the media during a break from a closed-door deposition with former U.S. President Bill Clinton outside the Chappaqua Performing Arts Center on Friday, February 27, 2026 in Chappaqua, New York, USA.
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Representatives Ro Khanna and Tim Burchett plan to introduce a new bill that would commission a nationwide investigation into waste, fraud, and abuse into state-administered programs that use federal funds, the content of which was shared exclusively with CNBC.
The proposed audit comes after reports of welfare fraud at the state level erupted several months ago, drawing harsh criticism from Republicans and some Democrats. The fraud allegations clash with Democratic proposals to tax the wealthy to pay for expanded social services, potentially sending trillions of new dollars into federal coffers.
Mr. Khanna, a California Democrat who is individually leading Democrats on a bill to impose a federal wealth tax, told CNBC in December that he would launch a fraud investigation as soon as he identified Republican allies, after some of his longtime supporters in Silicon Valley threatened to revolt over his proposed wealth tax. The bill’s introduction with Burchett, a conservative Republican from Tennessee, appears to be delivering on that promise.
“As progressive Democrats, we fundamentally believe that we need to show the public that their tax dollars are effective and that they are actually used to provide health care, child care, education and services to people,” Khanna said in an interview. “We have to show that we are good stewards of taxpayer money and that taxpayers can trust that the money they give will reach working class people.”
Despite promoting the audit with progressive ideals, Khanna insisted in an interview that the effort would be bipartisan and apolitical. Recent reports of fraud allegations helped launch a surge in immigration enforcement by the Trump administration in Minnesota that resulted in the deaths of two American citizens.
“One of the things we both wanted to do was make sure it wasn’t political,” Khanna said in an interview. “Our efforts will be undermined if this becomes a political crackdown targeting Minnesota or my home state. There are high-risk issues with federal programs that could happen in any state.”
Rep. Tim Burchett (R-Tenn.) speaks to reporters after a closed-door conference with Attorney General Pam Bondi and Deputy Attorney General Todd Blanche in front of the House Oversight Committee at the U.S. Capitol on March 18, 2026, in Washington, DC.
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In an interview with CNBC, Burchett agreed that the effort is more focused on discovering wrongdoing than scoring political points.
“We need to find out, and the way to do that is through an audit,” Burchett said, noting his political differences with Khanna.
“Law is a very smart guy. We disagree a lot, but integrity is one of the things I think we get along with,” Burchett said.
“Taxpayers need to trust that their hard-earned tax dollars are being spent and allocated wisely,” Burchett said in a statement.
Khanna has previously worked with Republicans on high-profile cases. He is the Democratic leader in a bill he co-sponsored with Republican Rep. Thomas Massey of Kentucky that would force the release of files related to the late sex offender Jeffrey Epstein.
The new audit bill, called the Government Audit and Accountability of Federally Funded and State-Controlled Programs Act, would require the U.S. Comptroller General to create a “high-risk list,” according to the bill text reviewed by CNBC. The list would identify “program areas and administrative practices” that pose the greatest risk to federal funds administered by state and local governments.
GAO must then submit recommendations to Congress to address high-risk areas.
In conducting an audit, GAO will review the findings of federal and state auditors, inspectors general, and attorneys general. Single audit report. and other publicly available federal oversight and program integrity data. The comptroller would also be able to conduct independent analysis of publicly available federal program data, but would be restricted from mandating “the production of information from state and local governments or the conduct of independent audits of state and local programs.”
“I don’t think anything like this has ever been done before,” Khanna said. “Apply to all 50 states to investigate audits of federal funds and meet public demands for transparency.”
