Talk Is Cheap When It Comes To Government Malfeasance

Washington, D.C. – To the extent anyone thinks about it, most people probably credit Mark Twain with having been the first to say that while everyone talks about the weather, nobody seems to do anything about it.

Though that may be changing following the passage of the bipartisan Protecting Taxpayers and Victims of Unemployment Fraud Act.

No matter who first said the quote long attributed to Twain, it's true. The same can be said for the problem of waste and fraud in government. It's a hot topic for politicians and reporters and interest group leaders and taxpayer advocates and business leaders and social scientists but very few of them have a plan for dealing with it.

The reason is simple: Someone, somewhere benefits from it. It's not all graft in the most specific sense of the word but, one way or another, it all ends up in somebody's pocket. That means there's always someone at the ready willing to explain why it's necessary or unavoidable or should be written off as a cost of doing business.

Credit House Budget Committee Chairman Jodey Arrington, R-Texas, for trying to bring the issue back to the forefront of the national conversation in a way that's meaningful and actionable.

The effort begins with a Budget Committee Staff Working Paper released Thursday on the subject of Improper Payments. Its appearance is timely, given the concerns sparked by Biden Treasury Secretary Janet Yellen that default could come as early as June 1 if Congress and the president fail to reach an agreement allowing the debt limit to be increased.

“The federal bureaucracy repeatedly treats taxpayer dollars with disdain, wasting hundreds of billions each year on improper payments with no accountability,” the committee said when releasing the document. There's hardly a man or woman outside the federal workforce who'd disagree with that.

The problem arises, the staff document goes on to say, comes from the fact that “Too often, success in government programs is measured by how many people are served and how quickly money is spent.”

This creates an “incentive structure” that, the working paper states, ultimately led “to widespread failures in verifying people's identities and eligibility for government programs.”

Indeed, the public was outraged to learn that during the pandemic, as Congress was shoveling money out the door ostensibly to keep people from becoming destitute because the politicians locked down the U.S. economy, fraud cost the taxpayers hundreds of billions if not more. Even more atrociously, in the time since the massive fraud was overcovered, the agencies and programs and bureaucrats who failed to institute safeguards have been penalized for their mismanagement.

The problem of “improper payments” – which are defined by the GAO as “payments that should not have been made or were made in the incorrect amount” should be easy to fix. Admittedly, as the working paper acknowledges. Yet, because the federal government does not currently track them for all programs, it seems not everyone is trying.

That means the actual cost to the taxpayers is probably higher than what has been identified. Still, it's a start – and one that should be addressed forthwith.

Perhaps cognizant of John Q. Public's growing frustration with the disconnect between the average American's personal finances and Washington's profligate spending of their money, the House Ways and Means Committee voted to pass H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act.

The legislation aims to recoup stolen funds from the Coronavirus Relief Fund and minimize future pillaging from federal programs.

Chairman Jason Smith, R-Mo., touted the development in a triumphant press release:

“Criminal organizations and foreign fraudsters exploited our unemployment benefits system to rob hundreds of billions of dollars from American taxpayers. Individuals had not just their benefits but their identities stolen to perpetuate this fraud, and sadly, when they controlled all of Washington, Democrats refused to lift a finger to recover these funds and hold the criminals accountable.

“The Protecting Taxpayers and Victims of Unemployment Act takes decisive action to recoup stolen funds and provide long-needed protections to prevent future fraud. Any individual who defrauds the American people deserves to be prosecuted, and I am proud this legislation will give states the tools necessary to ensure these criminals face the consequences of their actions.”

All well and good, but the problem extends into the deepest recesses of our bureaucracy.

Among other “key facts” unveiled by Budget Committee staff in the working paper:

• In 2022, the U.S. Government Accountability Office says the federal government spent at least $247 billion of taxpayers' money on improper payments – a 5% improper payment rate across all the government's programs.
• If improper payments were a separate category in the federal budget, it would be the sixth largest category in the federal budget, after Social Security, Medicare, national defense, Medicaid and interest on the debt.
• Improper payment spending was seven times larger than funding for the Department of Justice.
• The problem is bipartisan. Before Joe Biden became president, improper payments averaged 4.5%. percent. After he entered office, they jumped to 7% at a cost to the taxpayers of $281 billion during his first year in office and $247 billion during his second. That's a total expenditure over the first half of his administration of $528 billion.

The problem was widespread during COVID and may remain so. The inspector general at the U.S. Department of Labor Inspector General previously determined the Unemployment Insurance program experienced levels of fraud “likely higher than 21.52%” during the pandemic. Axios reported UI fraud could account for half of what the federal government spent on UI relief during the pandemic.

Another report coming from NBC News suggested fraud in the Paycheck Protection Program could have been as high as 10% – $80 billion out of the total allocated to keep businesses afloat during the lockdown. Estimates by the Small Business Administration's inspector general suggest as many as 70,000 PPP loans could have been fraudulent.

There's a partisan, political aspect to the issue as well. According to the committee document, “Less than 9% of Biden's $1.9 trillion American Rescue Plan package actually went to combatting COVID-19.”

Instead, the money – $350 billion according to the Budget Committee – went to “state and local government slush fund which was spent on unrelated COVID-19 initiatives like $783.5 million in stimulus checks to hundreds of thousands of convicted prisoners.”

Identification of the problems is only the first step. The new House GOP majority is already talking about solutions that would lead to improvements in identity verification, utilize a “Do Not Pay” database, establish a pilot program to allow states to keep a percentage of improper payments collected and would approve the disbursement of federal funds to agencies only after basic compliance standards are put in place.

The working paper called the legislation to accomplish that – The Protecting Taxpayers and Victims of Unemployment Fraud Act – “an important step to implement common-sense reforms that protect taxpayers from fraud in the UI program, including incentivizing states to recover improper payments, improving data and eligibility verifications, and allowing prosecutors to hold criminals accountable.” That's probably why it passed House Thursday by a vote of 230 to 200.

The need to hold the government accountable for the way it wastes money has been evident for decades. The failure to do so is largely a matter of political will rather than an inability for lawmakers to get their heads around the problem. The Budget Committee's Improper Payments working document lays out the need to take a substantial bite at the apple before the system rots.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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