The Corner

Economy & Business

One Thing Government Is Great At: Making Improper Payments

This is the time of the year where I wonder why the government continues to pay out billions of dollars in improper payments and does nothing to fix the problem. Seriously, how can we tolerate this? In 2013, improper payments for the highest risk programs totaled $106 billion. In 2015, that number was $137 billion.  

Who is accountable for this government failure? The government has become so big that no one is accountable, oversight is impossible, and no one seems to care at all. Look at the rate of improper payments for the EITC and the school lunch program. From our analysis of the chart:

Some programs, like the Earned Income Tax Credit (EITC), have not only a high improper payment amount but also a relatively high improper payment rate. The $15.6 billion in improper EITC payments represents a substantial portion, 24 percent, of total EITC spending—suggesting that the EITC is particularly prone to waste, fraud, and abuse. As the chart shows, the National School Lunch and School Breakfast programs, Medicare Fee-for-Service, Medicare Advantage (Medicare Part C), and Unemployment Insurance face problems similar to the EITC …

It is worth noting that the federal government’s figures are only estimates, and there is reason to believe the government intentionally underestimates the amount of taxpayer dollars lost to fraud and bureaucratic ineffectiveness. For example, three of the largest programs in terms of improper spending amounts are all related to health care. Medicare Fee-for-Service, Medicare Advantage (Medicare Part C), and Medicaid combined for $86.5 billion in improper payments in fiscal year 2015. However, Malcolm Sparrow of Harvard University, a recognized expert in health care fraud, argues that federal auditors underestimate the volume of improper payments resulting from fraud. He believes fraud could account for as much as 20 percent of federal health spending, which would considerably increase the improper payment figure reported by the government.

These programs should be put on the chopping block if they don’t finally address these problems. 

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Most Popular

How a U2 Anthem Defined Generation X

In Cameron Crowe’s Say Anything... (1989), Lloyd Dobler sketches out a stumbling, uncertain-but-nevertheless-determined path for his and my generation: “I don't want to sell anything, buy anything, or process anything as a career. I don't want to sell anything bought or processed, or buy anything sold or ... Read More

How a U2 Anthem Defined Generation X

In Cameron Crowe’s Say Anything... (1989), Lloyd Dobler sketches out a stumbling, uncertain-but-nevertheless-determined path for his and my generation: “I don't want to sell anything, buy anything, or process anything as a career. I don't want to sell anything bought or processed, or buy anything sold or ... Read More
Elections

Biden’s Middle-Class Tax Pledge

Biden is pledging not to raise taxes on anyone making less than $400,000 a year. As I note in my Bloomberg Opinion column, Democratic proposals to increase income taxes keep getting narrower in scope. In 1993, President Bill Clinton and a Democratic Congress raised income taxes on households making more than ... Read More
Elections

Biden’s Middle-Class Tax Pledge

Biden is pledging not to raise taxes on anyone making less than $400,000 a year. As I note in my Bloomberg Opinion column, Democratic proposals to increase income taxes keep getting narrower in scope. In 1993, President Bill Clinton and a Democratic Congress raised income taxes on households making more than ... Read More
Economy & Business

Is Biden Lying about Taxes?

A number of commenters to this post raise the possibility that Biden is lying when he says he won't raise taxes on households making less than $400,000. He might be. Maybe as president he would propose a tax increase on people making more than that, watch congressional Democrats lower the threshold, and then say ... Read More
Economy & Business

Is Biden Lying about Taxes?

A number of commenters to this post raise the possibility that Biden is lying when he says he won't raise taxes on households making less than $400,000. He might be. Maybe as president he would propose a tax increase on people making more than that, watch congressional Democrats lower the threshold, and then say ... Read More
World

The 82-Day Dictatorship

One wonders if it will be recorded in the history books that from March 30th to June 20th Hungary lived as the shortest dictatorship in European history, before voluntarily extinguishing itself. An odd act for a dictatorship. Prime Minister Viktor Orbán of Hungary had used the coronavirus to make himself ... Read More
World

The 82-Day Dictatorship

One wonders if it will be recorded in the history books that from March 30th to June 20th Hungary lived as the shortest dictatorship in European history, before voluntarily extinguishing itself. An odd act for a dictatorship. Prime Minister Viktor Orbán of Hungary had used the coronavirus to make himself ... Read More
Sports

Gregg Jefferies, Still Unfulfilled

Joel Sherman of the New York Post had an interesting feature Saturday on Gregg Jefferies, one of the great woulda-coulda-shoulda stories for Mets fans. The main theme of the story is that a number of Mets veterans now regret the extent of the hazing the team’s hard-living veterans imposed on the high-strung, ... Read More
Sports

Gregg Jefferies, Still Unfulfilled

Joel Sherman of the New York Post had an interesting feature Saturday on Gregg Jefferies, one of the great woulda-coulda-shoulda stories for Mets fans. The main theme of the story is that a number of Mets veterans now regret the extent of the hazing the team’s hard-living veterans imposed on the high-strung, ... Read More