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Economy

Federal Government Spent Over $1 Trillion in Improper Payments

In just one term, the Biden administration sent over $1 trillion to people who didn’t qualify for payments. An improper payment is “made by the government to the wrong person, in the wrong amount, or for the wrong reason,” according to federal guidelines. It includes overpayments due to fraud, mistakes or administrative errors.

For the last few years, fiscal watchdog group Open the Books (OTB) has detailed the massive number of improper payments the government throws out each year.

Between 2021-2023, federal agencies threw out over $764 billion on improper payments or $801.4 billion after adjusting for inflation.

The amount is $200 billion increase in improper payments from former President Donald Trump’s administration, adjusted for inflation. The federal government self-reported a net $235.8 billion in improper payments for fiscal year 2023.

The amounts were never this large in a fiscal year. For 18 years between 2004 and 2022, the federal government had made $2.9 trillion in improper payments.

BIDEN VS. TRUMP

Open the Books says Biden has wasted 34% more money on improper payments than Trump did during his first three years in office, even adjusted for inflation.

WHO’S LOSING MONEY?

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PUBLIC HEALTH: Medicaid and Medicare accounted for nearly $101.5 billion (43%) of improper payments last year. It’s a huge increase since 2012, when the figure was $64 billion.

COVID WASTE: Mismanaged COVID programs continue to waste tax dollars. The Department of Labor’s Pandemic Unemployment Assistance ($48.3 billion) and the Small Business Administration’s Paycheck Protection Program ($18.1 billion) combined for $66.4 billion of improper payments in 2023. The most recent estimates show $1 trillion lost to fraud during the pandemic.

THE DECEASED: Dead people received almost $295 million last year, mostly because the Office of Personnel Management was paying out benefits to retirees who were long gone.

PRISONERS: Another $171 million was paid to incarcerated people who are disqualified from payments.

THE TAX MAN: Internal Revenue Service threw out $25 billion by giving erroneous tax credits, with some programs reporting a mistake rate above 30%. $546 million went to families claiming to have more children than they actually did.

Only $51 billion (29%) of federal overpayments from last year have been recovered.

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