The bigger the government, the more improper payments it makes. This is issue often escapes mainstream scrutiny. It shouldn’t. Over at EPIC, Matthew Dickerson has the most recent number: $236 billion in 2023.
These improper payments, which have gone on for decades and are growing, are not mere accounting discrepancies; they are symptomatic of the sloppiness with which government manages taxpayers’ hard-earned money and its lack of an incentive to stop.
Year after year, billions of dollars are erroneously disbursed through various federal programs. Whether they are made because of fraud, clerical errors, or inadequate information, these payments represent more than just financial loss; they reflect a fundamental lack of accountability and oversight. It’s an issue that transcends partisan politics.
Dickerson adds:
Many of the largest programs in the federal budget have the highest improper payments.
Medicare, Medicaid, CHIP, and Obamacare reported more than $104 billion in improper payments in 2023.
Other welfare programs, including the Earned Income Tax Credit, Food Stamps, SSI, and the Child Tax Credit reported more than $40 billion in improper payments, with high improper payment rates.
While Social Security had a low 0.7 percent improper payment rate, it reported more than $8 billion in improper payments.
According to the report, the earned-income tax credit had an improper-payment rate of 33.5 percent in 2023. That’s significantly higher than it was when I was following that issue a few years ago. That pales in comparison with the 40.5 percent improper-payment rate of the Paycheck Protection Program’s (PPP) loan forgiveness and the 49.1 percent rate of the program’s loan-guaranty purchases.
Medicaid’s improper-payment rate is “only” 8.6 percent. But, as in the past, the program makes the highest amount of improper payments, at roughly $50 billion.
A very small share of these improper payments, less than 5 percent of the total, are underpayments.
Why no one cares about this and why we tolerate the scale of these improper payments year after year is a mystery to me. The whole report is here.