In past posts to this blog we have reviewed the Federal government's estimate that it wastes between $60 and $90 billion a year in fraud and erroneous payouts in its Medicare and Medicaid programs. Earlier this week we reviewed a Senate investigation of the National Science Foundation that had actually spent research dollars investigating on how to ride a bike, estimating when dogs became man's best friend, and measuring how racist are users of online dating sites.
But it does not end there, if you consider some recent identification of more government waste that has just been found and publicized over the past few weeks:
- An Associated Press article by Stephen Ohlemacher on June 14, 2011 documented how the Social Security Administration (SSA) made $6.5 billion in erroneous overpayment's to people not entitled to the payments in 2009. The $6.5 billion included $4 billion in bogus payments from a single SSA program, supplemental income program for the poor. This $4 billion was a whopping 10% of the program's entire budget.
More distressing than the $6.5 billion, which is bad enough, the SSA Inspector General has estimated that the entire Federal government doled out $125 billion worth of improper payments in 2010 for all reasons, fraud, incompetence, etc. This is $15 billion more than what were improper payments in 2009, a 14% rise in waste in just a single year. The trend in curbing government waste is obviously going in the wrong direction.
For comparison purposes, without the $125 billion in waste, last year's budget deficit would have been reduced by more than 10%. Put another way, if this wasteful spending had been sent back to the taxpayers, every U.S. household would have received over a $1,000. Disgraceful.
- A June 8, 2011 news report from Kevin Drawbaugh of Reuters was titled, "Prisoners, The Dead Got 2009 Car Tax Break, Report Shows." The Qualified Motor Vehicle (QMV) program was better know as Cash For Clunkers. People could trade in their older cars and get a government rebate and other tax benefits relative to the purchase of a new vehicle. The two fold purpose of the program was to jump start the auto industry and get people into more fuel efficient vehicles.
However, according to the report, it does not appear the IRS ran a very tight operation. According to the article, taxpayers who claimed the deduction were not required to provide the independent proof that an auto had actually been purchased. Obviously, a criteria like this opens up the entire program to fraud. The Inspector General for the program found the following:
- The IRS failed to qualify 4,257 individuals who made QMV claims.
- These 4,257 claims were for $151.1 in QMV benefits.
- 439 claimants were actually prisoners in jail when they claimed a total of $955,843 in sales tax as part of the program in 2009, "even though they were behind bars for a full year in 2009 when the vehicle was purportedly purchased."
- Another $36,490 worth of claims were for people who were dead before the start of the program.
- And adding insult to injury, 18 people who were under the age of 15 also got $31,139 in QMV benefits.
- Speaking of autos, consider another wasteful auto government program that involves the General Motors Volt electric car. General Motors convinced the political class to basically subsidize the purchase of a Volt since the company could not make the electric car cost efficiently. Thus, they got a corporate welfare benefit from Washington in the form of a taxpayer funded rebate. Theoretically, an American who buys a Volt will get $7,500 Federal tax credit.
Sounds simple enough, buy a Volt and the taxpayer rewards you with $7,500. But nothing is simple when it comes to wasteful government bureaucracies and programs. According to an LA Times article that appeared in the June 4, 2011 edition of the St. Petersburg Times, General Motors dealers are scamming the process in two ways. The most egregious scam involves the dealerships actually selling the car to themselves and keeping the $7,500 tax credit for themselves. They then sell the Volt to regular customers as a used car.
Since the rebate applies to only first time buyers of the Volt, the regular customers cannot now claim the rebate since the car is technically "used" even though the mileage is minimal. Thus, a government program designed to help an American own a new electric car, essentially funnels free taxpayer money to dealers, not end users, defeating the whole purpose of the rebate.
The second scam regarding the Volt is the rebate itself. If a product cannot stand on its own in the marketplace, it does not deserve to exist in that marketplace. General Motors should be making cars that can successfully compete on their own features, quality, and price, not on the generosity of the political class to waste taxpayer dollars on a private company's inferior products. All corporate welfare such as the Volt rebate is waste, pure and simple.
- In a June 3, 2011 report from CNN, it was reported that a new government report from the Commission on Wartime Contracting warned that billions of taxpayer money may be wasted because of the inability of both Iraq's and Afghanistan's governments to keep American financed programs and projects operating. Specifically, the Commission chairman, Christopher Shays stated in the report: "Unless government officials identify and address sustainment requirements and change or kill doomed programs, an enormous amount of taxcpayers' money will turn out to have been wasted.
After ten years in Afghanistan and eight years in Iraq, we still do not know how to effectively spend taxpayer dollars in a non-wasteful manner? Apparently that is a correct assumption. The CNN report goes on to state that over the past decade, wartime contracting in both countries has already identified specific programs that have wasted tens of billions of dollars. The investigation forecasts that past billions of waste "could pale in comparison to additional waste developing from [current and future] unsustainable projects and programs."
Over a hundred billion dollars from domestic Federal programs wasted annually, tens of billions of dollars already wasted in Iraq and Afghanistan with the potential for much more waste ever present, government programs that incorrectly pay benefits to dead people, imprisoned people, and underage people for their non-purchase of a car. It never ends.
There are several drivers behind this waste. The failures of these programs sometimes happen because the host country cannot supply trained personnel to continue the program, the host country may not be able to financially support the program, or the host country does not have the ability to perform essential maintenance on the bridges, schools, or other such efforts.
They also fail because of the standard government waste causes: incomplete analysis, overly ambitious objectives, poor planning, weak coordination, and inadequate follow up. Sound familiar? Probably the same reasons why Cash For Clunkers and waste in SSA programs exist. But as the title today says, you cannot spell w-a-s-t-e without a lot of W-a-s-h-i-n-g-t-o-n.
How do we get Washington out of the waste business? A number of recommended steps from "Love my Country, Loathe My Government" would go a long way:
- Step 1 - this step would reduce government spending in all entities by 10% a year for five years. Included in this step is a ground up, zero based approach of looking at every facet of every government operation in order to wring out waste, look for expense synergies, and kill unsuccessful or unneeded embedded government programs, projects, and departments. If government operations were streamlined and simplified, the chance of lowering waste, defining accountability for waste, and eliminating waste is greatly increased.
- Step 34 - hold members of Congressional committees accountable for waste in their areas of control and responsibilities, removing them from their committee posts for their inability to rein in wasteful spending.
- Step 37 - base annual pay treatment for Congressional members for their actual performance during the year, with a major part of their annual performance review being a component on how well they did or did not eliminate wasteful spending.
- Step 44 - do not use Federal tax dollars for any program or project that does not substantially affect a significant number of Americans from at least five states. Anything less than this criteria becomes the responsibility of the state governments.
This step would downsize and focus the Federal government to a much smaller set of programs and projects, hopefully saving money on local pork barrel programs and focusing attention on a smaller set of more important priorities.
- Step 46 - impose strict accounting, accountability, and audit procedures on every facet of the Federal government's budget, much like the Federal government has imposed on private industry under the Sarbanes-Oxley legislation, with the same penalties for not fulfilling these rather strict reporting and budget management duties including fines, imprisonment, and termination from their job.
Wouldn't it be nice if w-a-s-t-e was not such a big part of W-a-s-h-i-n-g-t-o-n? H-a-s-t-e is also a big part of Washington, it's about time that the political class used a little haste within Washington to finally get the TRILLIONS of dollars of wasteful spending under control.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com
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