How To Cut the Federal Budget By Billions

Liberals usually dredge up images of starving children, the bedraggled homeless and the penniless elderly to justify fatter federal budgets. More government spending is the remedy for every social injustice. They mock advocates of fiscal responsibility, branding them heartless monsters.

In the mind of a liberal, Washington's budgets cannot be trimmed. There is no waste, no fraud, no inefficiency, no pork in the budget.  Every penny in spending can be justified.  Liberals never let the facts become an obstacle to their quest to spend, spend, spend.

No one can contest the fact the liberals, often with the support of wishy washy conservatives, have won the battle of the budget most years. The result has been record-busting spending.  Just consider what has happened in the last 28 years.

In 1987, the federal budget burst through the $1 trillion ceiling for the first time.  Since then, it has tripled to $3.8 trillion for the current 2015 fiscal year.  That is nearly $300 billion more than the previous year. Next year's budget will likely be the first one to crack $4 trillion.

Those budget increases have been built on the backs of higher levels of debt.  In President Obama's first four years in office, budget deficits surpassed $1 trillion annually for the first time in U.S. history.  During this spending binge, America's debt has mushroomed to $18 trillion.

For most of the 20th century, federal government spending was about three per cent of the country's economic output or Gross Domestic Product (GDP).  But today your government's spending amounts to more than 20 percent of the GDP.

As the federal government has gobbled up taxpayer funds, it has become more unwieldy, inefficient and susceptible to fraud.  If you need evidence, look no further than the annual U.S. government audit released this month by Gene L. Dodaro, comptroller general of the United States.

In a report that attracted scant media coverage, Dodaro said the government's own records documented that various federal agencies doled out improper payments totaling $124.7 billion in 2014. That represents a $19 billion hike from the previous fiscal year, suggesting fraud is rampant.

For the record, the government classifies "improper payments" as fraudulent spending.  However, not all of these payments are the result of fraud.  Some improper payments are a by-product of lax government controls, non-existent safeguards or administrative bungling.

Over the years, the situation has grown worse.  Since fiscal year 2003, improper payments have cumulatively totaled almost $1 trillion.  That contributes to the growth in government spending that no politician or government official ever mentions.  It is Washington's dirty little secret.

In 2014, the largest share of over payments occurred in three programs: Medicare, Medicaid and the Earned Income Tax Credit.  Those plans accounted for 75 percent of the estimate of improper payments, according to a recent Government Accountability Office (GAO) report.  

One of the most popular frauds is the earned income tax credit claimed by those filing with the Internal Revenue Service.  The government handed out $17.7 billion in improper payments to taxpayers for this credit last year.  It accounted for 14.2 percent of the total improper payments.

During 2014, Medicare financed health services for about 54 million elderly and disabled persons at a cost of $603 billion.  Nearly 10 percent of that amount ($60 billion) was labeled improper spending. Most but not all of those payments can be attributed to fraudulent claims paid to Medicare providers.

The waste wasn't just confined to entitlements.  Improper payments during last year were found in 22 government agencies and across 124 federal programs.  That is the definition of pervasive waste. The government-wide payment error rate increased form four percent to 4.5 percent in 2014.

Error rates were even higher for some popular government programs. For example, the school breakfast program recorded 25.6 percent of its expenditures as improper payments.  The Farm Security and Rural Investment Act had a 23.1 percent fraudulent payment rate, reports the GAO.

No private or public corporation could operate with those error rates. But the federal government gets away with it because elected representatives do not hold them accountable. The bureaucracy thumbs its noses at scrutiny because mismanagement won't get you fired.

That's why Dodaro is not optimistic about the federal government addressing this critical issue.  In his report, he wrote that "the federal government is unable to determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken."

This disclosure should sound alarm bells in the halls of Congress. But sadly it won't.  Washington has become jaded to the waste, fraud and bureaucratic bungling. That is an indictment of the cozy inside the Beltway cabal that talks austerity but always votes for more spending.

Until Congress gets serious about budget reform, the situation will never improve.  Spending will continue unabated.  Wake up Americans.  Start demanding a zero increase in spending until the bureaucrats clean up their act.