U.S. Representative Ro Khanna (D-Calif.) speaks to members of the media during closed-door testimony with former U.S. President Bill Clinton outside the Chappaqua Performing Arts Center in Chappaqua, New York, U.S., on Friday, February 27, 2026.
Adam Gray | Bloomberg | getty images
Representatives Ro Khanna and Tim Burchett will introduce a new bill to launch a nationwide waste, fraud and abuse investigation into state-administered programs using federal funds, the report was shared exclusively with CNBC.
The proposed audit comes months after reports of state-level welfare fraud emerged several months ago, which were strongly condemned by Republicans and some Democrats. The fraud allegations collide with Democrats’ proposals to tax the rich to pay for expanded social services, which could add trillions of new dollars to the federal treasury.
Khanna, D-Calif., who is separately 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 finds a Republican cosponsor, as some of his longtime Silicon Valley supporters threatened to revolt if such a tax was adopted. The bill’s introduction with Burchett, a conservative Republican from Tennessee, appears to fulfill that promise.
“As a progressive Democrat, I fundamentally believe that we need to show people that their tax money is going to be effective, that we’re actually going to use it to get people health care and child care and education and services,” Khanna said in an interview. “We have to show that we’re going to be good stewards of taxpayer dollars, that taxpayers can have confidence that the money they’re paying will get to the working class.”
Despite pushing for the audit because of his progressive ideals, Khanna insisted in interviews that the effort would be bipartisan and apolitical. Recent reports of alleged fraud played a significant role in the Trump administration’s increased immigration enforcement in Minnesota, resulting in the deaths of two US citizens.
“One thing we both wanted to do was make sure it wasn’t political,” Khanna said in an interview. “If this becomes a political weapon to go after Minnesota or my home state it will undermine our effort. There’s an issue with federal programs that is high-risk, and it’s something that could happen in any state.”
Congressman Tim Burchett (R-TN) speaks to reporters after a closed briefing by Attorney General Pam Bondi and Deputy Attorney General Todd Blanch before the House Oversight Committee at the U.S. Capitol in Washington, DC on March 18, 2026.
Nathan Posner | Anadolu | getty images
In an interview with CNBC, Burchett agreed that the effort is more focused on detecting fraud than scoring political points.
Referring to his political differences with Khanna, Burchett said, “We need to figure this out, and the way you do that is an audit.”
Burchett said, “Ro is a very smart guy. We don’t agree on a lot of things, but honesty is one of the things we can live with.”
In a statement, Burchett said that “taxpayers need to trust that their hard-earned tax dollars are being spent and allocated wisely.”
Khanna has previously worked closely with Republicans on high-profile cases. He was the lead Democrat on legislation that would force the release of files related to late sex offender Jeffrey Epstein, a measure he sponsored with Rep. Thomas Massie, R-Ky.
The new audit bill, called the “Government Audit and Accountability of Federally Funded State-Administered Programs Act,” would require the U.S. Comptroller General to compile a “high risk list,” according to bill text reviewed by CNBC. The list would identify “program areas and administrative practices” that present the greatest risk to federal dollars administered by state and local governments.
GAO will then be required to provide recommendations to Congress to address high-risk areas.
In conducting audits, GAO will examine 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 could also conduct independent analysis of publicly available federal program data, but would be prohibited from “compelling states or local governments to produce information or to conduct independent audits of state or local programs.”
Khanna said, “I don’t think any such effort has ever been made.” “To implement in all 50 states, to look at the auditing of federal funds and address the people’s call for transparency on this.”