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Federal Government Waste: What does the Data Show?

It's not a pretty picture. According to an editorial posted Friday evening by Investor's Business Daily (IBD), "The federal government wasted more than $100 billion on overpayments last year. It knows this, even tracks it, but somehow can’t seem to stop it. Is there a better indication that government is too big?"

The federal government even has an official website -- PaymentAccuracy.gov -- that is replete with charts and data.

The term most often used with this government waste is improper payment.  Improper payments occur when either (from the frequently asked questions (FAQ) webpage):

  • federal funds go to the wrong recipient,
  • the recipient receives the incorrect amount of funds (either an underpayment or overpayment),
  • documentation is not available to support a payment, or
  • the recipient uses federal funds in an improper manner.

IBD writes in their editorial:

"Last year, the government made $126 billion in overpayments, nearly double the amount of made in President Bush’s last year.

"Improper payments in Medicare, for example, went from $10 billion in 2008 to $43 billion last year; and for Medicaid, the figured jumped from $19 billion to $29 billion.

"The Payment Accuracy site notes that the government also underpaid by $11 billion last year. Still, at $115 billion, the net overpayment just in 2015 is massive.

"It is, for example, equal to the combined budgets of the Departments of Justice, Energy, Interior, State and the EPA for 2015.

"It’s twice as much all the income taxes paid by everyone making less than $50,000.

"It’s roughly equal to the combined 2015 profits of Apple, Exxon Mobil, Wal-Mart, Google, Pfizer and Comcast."

Let me repeat those last paragraphs since they are truly mind-boggling (emphasis added):

"It’s twice as much all the income taxes paid by everyone making less than $50,000.

"It’s roughly equal to the combined 2015 profits of Apple, Exxon Mobil, Wal-Mart, Google, Pfizer and Comcast."

Another way to look at the total amount of improper payments, consider the Adjusted Gross Income (AGI) threshold in 2013 for the top 25% of taxpayers was $74,955 while the AGI threshold to be in the top 50% was $36,841, according to the National Taxpayers Union (NTU) analysis of who pays federal income taxes.

The editorial reminds us that some improper payments can be for the correct amount, but lack documentation. However, they point out:

" . . . But Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University who has studied these data, says the figures on waste are probably too low. She notes that Harvard University’s Malcolm Sparrow says that 20% of federal spending on health care programs could result from fraud.

“The government has become so big that no one is accountable, oversight is impossible, and no one seems to care at all,” she writes.

"And, indeed, if you bother to read audits from agency inspectors general or the Government Accountability Office, you’ll be treated to an endless stream of depressing examples of rampant mismanagement of taxpayer funds."

Take a few minutes to browse the data and charts at the PaymentAccuracy.gov website, and then write to a member of Congress to express your views about this form of federal government waste. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

UPDATE (5/23/16): Title rewritten into a question.

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