By ALANNA DURKIN RICHER, Associated Press

WASHINGTON (AP) — President Donald Trump’s pick to lead a new Justice Department division dedicated to rooting out fraud said Wednesday he would pursue prosecutions “without fear or favor” as questions grow about how the new unit will operate free of political influence from a White House that has declared a “war on fraud.”

The proposed National Fraud Enforcement Division has raised eyebrows not only because fraud is already prosecuted by the agency’s Criminal Division but because the White House has suggested it will have an unusual role in overseeing the new division’s work.

Colin McDonald’s nomination to serve as the first assistant attorney general in charge of the new division comes as the Trump administration has put fresh attention on allegations of widespread fraud in Minnesota. During his State of the Union speech Tuesday, Trump announced that Vice President JD Vance would lead the “war on fraud,” accusing members of Minnesota’s Somali community of having “pillaged” billions from American taxpayers.

McDonald didn’t directly answer when pressed during his confirmation hearing Wednesday whether he would follow an order from the president to open a certain investigation. McDonald, a seasoned prosecutor who works in Deputy Attorney General Todd Blanche’s office, would only say that he follows the facts and applies the law in all cases.

“The vision that we have is a division that is large enough where no fraud is too big, and no fraud is too small, so that we can reach all actors within the chain of criminal culpability and no one more than that,” McDonald said. “Those are the ones that we are going to be looking after, investigating and following the facts — without fear or favor.”

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Even for an administration that has broken down many barriers designed to insulate the Justice Department from White House influence, Vance’s announcement in January that the new fraud assistant attorney general would report directly to the White House came as a shock to many in the department.

The administration has since indicated that McDonald would instead report to the deputy attorney general — like all other division heads — though his confirmation hearing left open many questions about exactly what role Vance will have in overseeing investigations and prosecutions.

Federal prosecutors have been scrutinizing staggering amounts of fraud in Minnesota for years and dozens of defendants have been charged — most of them of Somali descent — under the Biden and Trump administrations. But the scope of the alleged fraud came under an intense spotlight in recent months during the Trump administration’s immigration crackdown in Minneapolis. A federal prosecutor has said that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen.

If confirmed, McDonald could immediately face a challenge in recruiting prosecutors to investigate fraud as the U.S. attorney’s office in Minnesota has been gutted by resignations in the wake of high-profile fatal shootings of civilians by federal agents during the immigration enforcement surge. Among those who have resigned during a period of tension in the office over the Justice Department’s response to the shootings is Joseph Thompson, the prosecutor who had been leading the sprawling Minnesota fraud probe.

Critics have questioned the true purpose of the new division, given that the department already prosecutes fraud through its Criminal Division. The division’s fraud section last year charged 265 people, up more than 10% from the year before. Those cases amounted to more than $16 billion in intended fraud losses, a record high for the section and more than double the total from 2024.

Even with those successes, McDonald told the committee there is much more work to be done “to ensure that our taxpayer funded programs are free of fraud.”

“The problem is massive,” McDonald said. “And so President Trump and the attorney general were right to identify this as a place where we needed to put significantly more focus.”

By CHRISTOPHER RUGABER and PAUL WISEMAN, Associated Press Writers

WASHINGTON (AP) — President Donald Trump sought in his first State of the Union address to sell Americans on the idea of a booming economy, falling prices, and soaring jobs, yet he faces a skeptical public with a much gloomier view.

Barely 12 hours before his speech, in fact, The Conference Board, a business research group, released its latest consumer confidence report. It showed that overall confidence in the economy remains historically low, and is barely above the level it plunged to in the depths of the COVID recession.

In February, its index ticked up to 91.2, which is noticeably below a four-year peak reached in November 2024 of 112.8. Americans remain dejected by high prices and see few jobs available, the survey found.

Other polling has yielded similar results: Only 39% of Americans approve of Trump’s economic leadership, according to the latest Associated Press-NORC Center for Public Affairs Research survey. And the University of Michigan’s consumer sentiment survey remains mired at recessionary levels.

Trump sought to overcome that gloom by pointing to economic data that paints a brighter picture, a tactic that President Joe Biden tried with little success. But on Tuesday night there were gaps between the president’s claims and the economic reality many Americans are facing.

“Inflation is plummeting, incomes are rising fast, the roaring economy is roaring like never before,” Trump said.

President Donald Trump delivers the State of the Union address to a joint session of Congress in the House chamber at the U.S. Capitol in Washington, Tuesday, Feb. 24, 2026, as Vice President JD Vance and House Speaker Mike Johnson of La., applaud. (AP Photo/Mark Schiefelbein)

The economy grew last year, but more slowly

To begin with, the economy is growing but it is hardly “roaring.”

It expanded 2.2% last year, down from 2.8% in Biden’s last year and 2.9% in 2023. To be sure, most Americans were deeply dissatisfied with the price spikes under Biden that pushed inflation to a peak of 9.1% in 2022, a four-decade high.

A roaring U.S. economy typically looks more like the late 1990s, when growth topped 4% for four years in a row, or in the 1980s, when it rose by 3.5% or higher for six years in a row.

Consumers are still struggling with high prices

Inflation has slowed in the past year, but many Americans still cite high prices in surveys as a key reason they are unhappy with the economy.

Trump correctly noted that core inflation, which excludes the volatile food and energy categories, fell to a five-year low in January. Yet other price measures show that inflation remains stubbornly elevated: A gauge of core prices closely monitored by the Federal Reserve was 3% higher in December than a year earlier, above the Fed’s 2% target. It places less weight on housing costs, which have cooled, than the measure Trump cited.

Nearly half of the people responding to the University of Michigan’s consumer sentiment survey in February “spontaneously mentioned high prices eroding their personal finances,” Joanne Hsu, director of the survey, said in a statement.

Trump noted that the price of eggs has fallen sharply from its peak, which is true, but most necessities Americans rely on — groceries, rent, electricity — remain much more expensive than they were five years ago. And electricity prices rose another 6.3% just in the past 12 months.

Trump’s tariffs have also pushed up the cost of many imported items, including furniture, auto parts, tools, and clothes. And groceries such as ground beef, coffee, and bananas have risen sharply in the past year. Ground beef prices, for example, are up 17%.

President Donald Trump delivers the State of the Union address to a joint session of Congress in the House chamber at the U.S. Capitol in Washington, Tuesday, Feb. 24, 2026. (Kenny Holston/The New York Times via AP, Pool)

Hiring ground nearly to a halt last year

One reason for the consumer gloom is likely the sharp slowdown in hiring last year. Employers added just 181,000 jobs in 2025 — or 15,000 a month – making it the worst year for job growth outside of a recession since 2002.

And despite Trump’s pledge to revive American manufacturing, factories lost 108,000 jobs in 2025 on top of the 202,000 lost in the last two years of the Biden administration. Auto and auto parts plants have cut nearly 74,000 jobs the past two years.

Trump’s tariffs are partially to blame because they force many factories to pay more for imported raw materials and parts. But high interest rates have also hurt manufacturers over the past couple of years. And many of them hired aggressively — perhaps too much — in 2021 and 2022 when the U.S. economy was roaring back from pandemic lockdowns. Automation also means that many factories need fewer workers.

Hiring did come in unexpectedly strong in January at 130,000 new jobs, and factories added jobs for the first month in more than a year.

Benefits of tariffs remain unclear

Trump suggested his tariffs have directly contributed to an economic boom for the U.S., but most Americans have likely seen little benefit.

“Moving forward, factories, jobs, investment and trillions and trillions of dollars will continue pouring into the United States of America,” Trump said.

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Trump once again made his tariffs sound painless, insisting that they are paid by foreign countries. In fact, they are paid by U.S. importers who often try to pass the burden along to their customers through higher prices. Foreign companies might take a hit if they have to cut prices to maintain sales in the United States. But import prices haven’t fallen significantly, suggesting that overseas exporters aren’t feeling much pain.

A study by Harvard University economist Alberto Cavallo and two colleagues found that U.S. consumers were eating 43% of the higher tariff costs and that U.S. companies were absorbing most of the rest.

And so far Trump’s sweeping import taxes haven’t delivered much progress toward his goal of reducing the vast and longstanding U.S. trade deficit — the gap between what America sells to foreign countries and what it buys from them.

The U.S. trade deficit in goods such as automobiles and appliances — the focus of Trump’s protectionist policies — actually hit a record $1.24 trillion last year, increasing 2% from 2024.

By JOHN HANNA, AP Political Writer

Candidates and political groups are pouring money into Texas’ hotly contested U.S. Senate race at a record pace, partly fueled by Democrat James Talarico’s fundraising and allies of Republican Sen. John Cornyn trying to save his long career.

Heading into Tuesday’s primary elections, the cost of advertising and reserved advertising time had topped $110 million, the most ever for a Senate primary, according to the ad-tracking firm AdImpact. The heavy spending in Texas is a preview of the money that is expected to flood this year’s midterm elections across the U.S. with control of Congress at stake.

Talarico faces U.S. Rep. Jasmine Crockett for the Democratic nomination and on Wednesday launched his final television ad before the primary. It attacks the Trump administration’s aggressive immigration enforcement tactics, describing U.S. Immigration and Customs Enforcement as “secret police.”

Talarico reported raising more than $21 million through last week. Crockett has raised nearly $8.6 million, though the majority was transferred from her House campaign account after she entered the race in December, three months after Talarico.

Crockett has positioned herself as the bigger fighter, and the tone of Talarico’s last ad contrasts with appeals he’s made to disaffected Republicans by discussing his Christian faith.

“We can transform this broken political system,” Talarico said during a rally Tuesday in Tyler in northeastern Texas, an area President Donald Trump carried by a wide margin in 2024.

Democrats haven’t won a Senate race in Texas since 1988, but Cornyn is facing the race of his career in the primary against Texas Attorney General Ken Paxton and U.S. Rep. Wesley Hunt.

The bulk of the spending in Texas, more than $75 million, has come from groups not tied to the candidates, according to AdImpact.

The vast majority of that is on the Republican side, with the spending by groups helping Cornyn’s bid for a fifth term approaching $57 million so far. The pro-Cornyn Texans for a Conservative Majority has dropped more than $22 million on anti-Hunt ads.

Cornyn’s official campaign committee has raised more than $11 million and two other groups bearing his name have spent another $10 million helping him.

Republicans expect Paxton to at least make a May 26 runoff, despite a low-key campaign until recently and years of legal problems.

Cornyn and the Senate’s GOP leaders worry that Republicans will have to spend tens of millions of additional dollars to keep the Texas seat if Paxton is the nominee.

“It is a strong possibility we cannot hold Texas if John Cornyn is not our nominee,” GOP Sen. Tim Scott of South Carolina said Wednesday on “Fox & Friends.”

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Other Republicans disagree. Paxton was in Washington on Tuesday, attending President Donald Trump’s State of the Union address as the guest of Texas Republican Rep. Troy Nehls.

Paxton so far has raised about $6 million for his campaign, and Hunt, about $2 million, though he had about $3 million in his House campaign account when he entered the Senate race in October, according to reports filed with the Federal Election Commission.

But the Republican candidates’ collective campaign fundraising of $19 million doesn’t match what Talarico’s campaign has raised on its own, suggesting that outside groups will be crucial to helping the GOP retain the seat.

Talarico got a financial boost this month when his campaign said it raised $2.5 million in the 24 hours after late-night host Stephen Colbert pulled an interview with him for his nightly Feb. 16 broadcast, citing the demands of CBS lawyers. Contributions of less than $1,000 at that point don’t have to be reported until after the primary.

Crockett recently told supporters during a campaign stop that when she ran for the Texas House in 2020 — two years before winning her Dallas-area seat in Congress — she was outspent 5-to-1.

“People said, ‘There’s no way she’s going to win,’” Crockett said, tearing up. “I show up, authentically me. That makes some people cringe, but the people are tired of politics as usual.”

Associated Press journalist Bill Barrow in Atlanta contributed to this report.