Improper Payments Topped $100 Billion in 2013

On Wednesday, the Government Accountability Office testified before Congress that federal agencies made over $100 billion in improper payments last year—and this is likely an underestimate.

To put that number in perspective, $100 billion is more than the combined total budgets of the Coast Guard, U.S. Immigration and Customs Enforcement Agency, Border Patrol, Secret Service and Federal Emergency Management – by a longshot.

The GAO report is the latest example of why Washington must get serious about eliminating waste, fraud, and abuse, and enacting sweeping reforms and spending cuts before any more damage is inflicted on American taxpayers.

President Barack Obama speaks during a press conference at the White House, Oct. 8, 2013 in Washington, D.C. (Getty Images)

Improper payments result when people collect money from government programs for which they are ineligible. For example, paying unemployment insurance to people who are secretly working is an improper payment, and needlessly adds to the already out of control deficit.

The GAO believes it’s likely the amount of improper payments is even higher than the $105.8 billion reported.

In their words, “the federal government’s inability to determine the full extent to which improper payments occur” represents a serious limitation on their estimates. Some programs, like the Temporary Assistance for Needy Families welfare program, do not bother reporting estimates of improper payments at all.

The largest source of improper payments came from Medicare, which represented almost half of all overpayments made. Just two entitlement programs – Medicare and Medicaid – together accounted for a whopping $64 billion in improper payments.

Currently, government-run health care programs gobble up one out of every five dollars the government spends.

Of course, the fact that one of the biggest sectors of government spending is also one of the biggest sources of waste, fraud, and abuse is no coincidence – it is merely a sign of the inefficiency of bloated bureaucracy. Inflating the system more with Obamacare will only exacerbate existing problems.

Unfortunately, the Left seems determined to do so, seeking to expand a Medicaid program riddled with problems, and refusing to reform Medicare which is by far the single biggest driver of the nation’s $17 trillion national debt.

Photo Credit: Getty Images

At this point, most people’s eyes glaze over these large spending numbers. Given how out of control spending in Washington has become and the regularity of unfathomably large numbers, it’s easy to see how we’ve become desensitized.

But these are not numbers to write off as a drop in the bucket. During the first five years of President Barack Obama’s Administration, the federal government has made a jaw-dropping $500 billion in improper payments – money that could have returned to the American people and invested in the private sector economy to create desperately needed jobs.

Last year, House Minority Leader Nancy Pelosi (D-Cali.) remarked that “the cupboard is bare…there’s not more cuts to make.”

Obviously, she was way off the mark. The federal government took in a record $2.7 trillion in 2013. But if this the return on investment taxpayers are getting, then Congress should not ask the American people for an additional dime on top of the trillions we already pay.

President Obama’s White House is trying to spin this story as a good thing, pointing out that the overpayments have decreased since 2010. But this is merely putting lipstick on a pig—2010 was the highest year ever of improper payments, topping $120 billion.

Decreasing overpayments from this peak, although a step in the right direction, should not be applauded as some magnificent example of fiscal responsibility. No matter how you slice the pie, the fact remains that improper payments have increased dramatically since the president took office, continue to be out of control.

These payments are being handed out on the backs of hardworking American taxpayers who are struggling to make ends meet while Washington bureaucrats spends their hard-earned dollars so irresponsibly. There’s no sugar coating that.

Akash Chougule is a policy analyst at Americans for Prosperity, the nation’s premier free-market grassroots organization. Akash brings a unique perspective to AFP, and specializes in education, health care, tax, and transportation issues.

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