Biden administration on track for $1 trillion in improper payments

The federal government blows nearly half a million dollars every minute of every day on erroneous payments, according to a new report that hopes to shock Washington to clean up its act.

To Uncle Sam, they’re known as improper payments. Some are just mistakes where the government pays out too much or, in some cases, too little, to a Social Security or welfare recipient. But much is old-fashioned fraud.

And they’re a growing part of the government’s sea of red ink, according to Open The Books, a watchdog.

The nonprofit said President Biden is on track to oversee $1 trillion in improper payments during his tenure, adjusted for inflation. That would be nearly $200 billion more than under former President Donald Trump.

Open the Books says at the current rate of waste, the government loses more than $7,500 each second, or $450,000 per minute.

“That’s a lot of cash to lose between the proverbial couch cushions,” the watchdog said.

Medicare and Medicaid, the government’s big medical programs, account for the largest single chunks of the waste, at $101.5 billion last year, according to Open The Books.

The IRS blew $25 billion in erroneous tax credit payments and more than half a billion on families claiming more children than they had.

A smaller amount, a still not insignificant $295 million, was paid in retirement benefits to “long gone” dead people, the analysts said. An additional $171 million was paid to prisoners.

Improper payments at their core are spending where the government can’t say whether it got the right amount of money to the right person. It could be too much or too little.

Orice Williams Brown, chief operating officer at the Government Accountability Office, told Congress this month that 90% of the time it’s an overpayment. And much of that is fraud.

That shocked lawmakers.

“Goodness, that was more than I thought,” said Rep. Summer Lee, Pennsylvania Democrat.

Agencies are tasked with calculating their own improper payment rates, which Open The Books combined for its new analysis.

The analysts said improper payments peaked in fiscal 2021, hitting $281.4 billion. That was fueled by the pandemic, when the government opened its wallet and shoveled cash at nearly anyone who asked.

It dropped to $247 billion in 2022 and $235.8 billion last year.

“Barring something unprecedented, the total will cross the $1 trillion mark by the time President Biden’s term ends,” Open The Books said.

Even that is probably an undercount.

Outside experts figure that hundreds of billions of dollars in pandemic assistance went to fraudsters in 2020 and 2021, which would dwarf the official reported figures.

Ms. Brown told Congress that the GAO figures fraud across the federal government totals $233 billion to $531 billion annually.

And the government, it turns out, is bad at recovering it.

Of last year’s bogus payments, just $51 billion had been clawed back, Open The Books reported.

The issue has drawn bipartisan interest on Capitol Hill, where lawmakers are pushing legislation requiring the administration to come up with plans to fix payment errors.

But some Democrats have resisted, worrying that the focus on bad spending will sour taxpayers on government support programs. Many of those Democrats also complained about efforts to claw back money from Americans who got overpaid through honest mistakes.

“Our residents after they made the mistake and they get the letter in a year, that’s not fair,” said Rep. Rashida Tlaib, Michigan Democrat. “They’ve already spent the money. They’re living check by check. They don’t deserve to be punished.”