U.S. Government Misallocated $125 Billion, Various Programs Affected

For those who find every cent spent by the U.S. government, they might want to reevaluate their position. While taxation and spending is written into the U.S. constitution, waste however, is not. Reason.com reports that 13 fraud ridden government programs lost billions in 2014, and rose again in 2015. The $106 billion loss last year turned into a $165 billion loss this year, which is a $19 billion up tick in losses. The prior billion dollar loss was 3.5 percent of total spending, which makes the current billion dollar loss at 4 percent.

According to the Washington Post, this should come as no surprise to the U.S. government under President Obama, who saw a slightly larger billion dollar loss at $125 billion in 2010.

The three “high error” government programs cover Medicare Fee-for-Service, Earned Income Tax Credit (EITC), Medicaid, Medicare Advantage (Part C), Unemployment Insurance (UI), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Retirement, Survivors, and Disability Insurance (RSDI), Medicare Prescription Drug Benefit (Part D), National School Lunch Program (NSLP), Rental Housing Assistance Program, Pell Grants, Children’s Health Insurance Program (CHIP).

At least three of the 13 at-risk programs commanded the largest losses, which were identified as Medicare, Medicaid, and the Earned Income Tax Credit. Medicare takes the coveted gold medal for a loss of $60 billion, the silver medal belongs to the EITC with $17.7 billion lost, and Medicaid is in a close third place with $17.5 billion. The Government Accountability Office says that this trend will continue.

“With outlays for major programs, such as Medicare and Medicaid, expected to increase over the next few years, it is critical that actions are taken to reduce improper payments.”

The data was posted by Payment Accuracy, a government website that handles fraud, waste, and abuse and compiled by the Mercatus Center. It covers any government program that suffers losses of over $750 million in tax payer money. Though Medicare is the biggest offender cost wise, the EITC has the bigger percentage of the overall budget. Government waste, fraud, or abuse amounts to nearly a quarter of the program’s budget, while Medicare doesn’t even come in second at 10.1 percent. NSLP has the second worst at 15.7 percent, and a near tie at over 9 percent for Medicare Advantage (Part C) and Unemployment Insurance.

The high error 13 are considered as such because they are serial offenders. Medicare has been on the list as far back as 1990, with the state version Medicaid since 2003.

The Washington Post reported that in 2002, Congress attempted to take steps to reduce the fraudulent payments in these government programs, but have run into unintended consequences and seemingly have had little effect.

What are your thoughts? How can we manage these government programs that cost the country billions of dollars? Should we maintain them, let them run amok, or rescind them entirely?

Leave your thoughts.

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