Waste often comes to mind when discussing government spending. People intuitively realize that it costs a lot of money to operate a government as sprawling as ours, and that money is bound to get lost somewhere along the way. Turns out the level of waste may be even higher than the most strident critics could imagine. New numbers released by the federal government revealed around $100 billion in improper payments were made by various agencies last year.
Though $100 billion is a number so large it can be hard to get your mind around, it is roughly what the Obama administration spent on the Afghanistan war and other military operations last year. The $100 billion in erroneous payments were also not a fluke, but appear instead to be consistent with numbers from each of the last five years.
So what did the money go towards? Turns out, a lot of things. Much of the money went towards payments to Medicare and other health care programs. This problem is a common one that has plagued the government for years and shows no sign of abating. Of the total improper payments last year, $50 billion were spent on Medicare's various health insurance programs, far more than went to any other program.
According to a bipartisan report, the improper Medicare payments have risen from 8.5 percent in 2012 to 10.1 percent in 2013. Even more troubling than the rise is that the rise occurred despite the Centers for Medicare and Medicaid Services (CMS) spending millions to hire more recovery audit contractors whose sole job is to track down providers that are over billing for Medicare services.
Other programs that took up large amounts of misspent money include the IRS's Earned Income Tax Credit, which doled out more than $14.5 billion in improper tax refunds. The problem has to do with inaccurate tax records that lead to payments to families who do not legitimately qualify. Medicaid, the government health program for lower income individuals, saw more than $14.4 billion in improper payments. Though this represents a costly problem for the government, it's actually down dramatically from the $23 billion in improper payments made in 2010. Finally, the unemployment insurance program accounts for more than $6 billion in improper payments, usually made to those who are actually employed.
Though some of the payments were made due to fraud on the part of recipients, the majority occurred due to simple clerical errors, outdated computer systems and other easily preventable errors. This is especially critical recently, given the scrutiny that Congress has directed at the budget. The vast sums of money handed out each year due to improper payments represent a big chunk of money that could be directed towards other, useful programs.
Sources:
'Staggering': Government Making $100B in Improper Payments EveryYear, by The Associated Press, published at FoxNews.com on July 9, 2014.
Senators Blast CMS for Record Payment Errors, by Ferdous Al-Faruque, published at TheHill.com on July 9, 2014.
