Posted on 01/04/2025 6:45:42 AM PST by MtnClimber
The fiscal year 2024 data are in, and they show that the Biden administration has overseen a record $926 billion in improper and unknown federal payments since 2021.
That is 38 percent more than the Trump administration’s $673 billion total over four years, and it’s only 4 percent less than the Obama administration’s $962 billion total over eight years. Moreover, all of these figures are underestimates as they only account for about 68 programs out of the more than 2,000 that the federal government operates. The Biden administration’s $926 billion total translates to more than $7,000 for every household in America. That’s about seven months’ worth of groceries for a family of four, or three mortgage payments for the average homeowner.
Despite the high price tag of improper payments — which are payments made to the wrong people or in the wrong amount — there’s been little attention and zero consequences for government agencies that regularly squander taxpayers’ dollars. Instead of penalties, agencies with increasing improper payments are rewarded with bigger budgets. More than a quarter of the programs that track improper payments reported improper payment rates of 10 percent or higher in 2024. Major refundable tax credits such as the earned income tax credit, the American opportunity tax credit, and the refundable portion of Obamacare’s premium tax credit all exceeded a 27 percent improper payment rate.
Most improper payments consistently flow through the federal government’s health insurance programs. Last year, Medicare, Medicaid, and the Children’s Health Insurance Program sent out $87 billion in improper payments — enough to pay for the health insurance premiums of 9.7 million individuals or 3.4 million families.
Almost no household could afford to consistently spend a significant portion of its budget on wrong payments. So how and why is this commonplace in the federal government?
Most improper payments are the result of agencies’ failure to confirm that someone is who he says he is and that he is eligible for the payments he receives. Sometimes, improper payments are outside of agencies’ control. For example, it can be hard to verify whether someone who claims the child tax credit, the earned income tax credit, and other child-dependent benefits such as food stamps actually had that child living with him for at least half of the year. Even then, there are things agencies could do — such as refusing to process tax returns with child-related benefits until after April 15 so that the IRS can verify that the same child isn’t claimed on more than one return, or cross-reference the addresses of children who receive school lunch benefits with the addresses of the individuals claiming them as dependents.
Much of the time, however, agencies fail to use data that are available to them, ignore recommendations from their inspectors general, and outright defy legal requirements for fraud protection.
Consider the Small Business Administration’s Restaurant Revitalization Fund, which issued 30.3 percent of all its payments, or $8.7 billion, improperly. According to the SBA inspector general’s report, most of this was due to the SBA’s simply ignoring planned and legally required protocols. For example, the agency awarded $552 million to 901 applicants that had active holds on a file the SBA was supposed to check. And it issued $7.9 billion in awards to about 63,000 applicants despite the fact that only 24 percent of those applicants had cleared the IRS validation test.
While Congress’s attempts to crack down on improper payments have been all bark and no bite, the same can’t be said of Elon Musk or Vivek Ramaswamy, who have been tasked with running a new, nongovernmental Department of Government Efficiency.
In a November 19 post on X, Ramaswamy called out the SBA’s current leadership for rejecting its inspector general’s recommendation to stop sending payments to people who are on the Treasury’s Do Not Pay list and concluded, “This kind of flagrant waste needs to end. Time for @DOGE.” Cracking down on improper payments provides an opportunity for the DOGE to save up to $1 trillion over ten years even before it shrinks or eliminates any government programs. The DOGE will need Congress’s help, however, to ensure lasting changes.
And yet improper payments are only a symptom of the disease of excessive government spending. The federal government spent $3.8 trillion on transfer payments last year. That’s $29,000 per household. Since 2005, transfer payments and improper payments have grown twice as fast as the economy. The DOGE’s efforts to improve government efficiency must therefore include both reducing improper payments and getting the federal government out of things it has no business doing.
RACHEL GRESZLER is a senior research fellow at the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation.
Don't fall prey to Deep State lies. A visit to the grocery store will quickly establish that the current overall inflation rate is somewhere around 20% {a dangerous level difficult to recover from without painful measures - viz 1981.)
The '3%' figure means 3% 👉over last year👈. While that is a somewhat modest inflation growth, it is NOT reducing inflation... neither is lowering Fed interest rates 1/4% while inflation is growing. They are gleefully lying to us and planning on torpedoing the dollar all together.
The source of the current inflation growth is the Bitem Administration recently spending $1 trillion every 100 days! Do not be deceived.
Yep
“Improper payments” too often translates to “political patronage” - not laziness or mistakes.
So let’s see, 10% of trillions is...carry the one...
This is one of the problems with governing by continuing resolution. It should be easy to tell an agency that because you had $X of improper payments your budget will be reduced by between 50% and 100% of X. The agencies would very quickly get the fraud under control if they actually paid a price for tolerating it. This however requires the appropriating committees to actually look farther than the top line amounts.
L8r bump!
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