Debate Desk
Is Fraud and Improper Spending in Government Programs Too Small to Matter?
The GAO reports roughly $162 billion in improper payments for fiscal 2024; much of it is error, and recovering it is worth far more than most savings.
The claim
Defenders of government programs say that fraud is rare, that overpayments are mostly paperwork errors and that talk of waste is a pretext to cut benefits.
The answer in three points
- The sums are large. The Government Accountability Office reported about $162 billion in improper payments for fiscal 2024, and hundreds of billions in some earlier years. Not all of it is fraud, and not all of it is recoverable. The figure is large next to the savings that most budget proposals seek.
- Improper does not mean innocent. The category includes payments made in error, payments without proper documentation and payments to people who are not eligible, as well as outright fraud. All of them are tax dollars that did not go where Congress meant them to go.
- Pandemic-era aid showed the danger. Large programs that paid fast with little checking led to billions in fraud, including by organized groups, and prosecutors have continued to pursue cases. Better controls, such as verification of identity and income and sharing of data among agencies, reduce losses without cutting benefits to eligible people.
A simple discipline applies: any program should be able to say how much of its spending went to the wrong people last year and what it did about it. Agencies that cannot answer have not looked. Citizens can ask for the inspector general reports that already exist, and read them.
The numbers
- The Government Accountability Office estimated federal improper payments at about $162 billion in fiscal 2024, according to its report.
- The Department of Justice has reported charging many defendants for fraud in pandemic relief programs, with billions of dollars at issue, according to its COVID-19 Fraud Enforcement Task Force.
- Federal agencies have reported improper payments of more than $2.7 trillion since fiscal 2003, according to the Government Accountability Office.
What they will say next
"Most errors are underpayments or paperwork." Some are, and an error that costs the Treasury money is still a cost. The aim is accuracy in both directions.
"Cracking down will block eligible people." Good controls verify without burdening applicants, and they should be tested.
"Fraud is a small share of spending." Even a small share of a very large budget is a very large sum.
"Private business has fraud too." It does, and it has strong incentives to find it. Government programs have fewer.
Every dollar lost to fraud is taken from a taxpayer and from a person truly in need.
"Improper payments include underpayments." Some do, and the totals reported by agencies are mostly overpayments and payments with missing documentation. Either way, the number tells you how often the government cannot show that its money went where the law said. A business that could not account for that share of its payments would have trouble with its auditors, and a government should have the same trouble.