Most of us work hard for our money and we sweat plenty until pay day finally rolls around. But there are some people who never even lift a finger for their kopeks and don’t even bother to say thank you when they get them.
Actually, there’s a good reason why they don’t: they’re dead.
Last year, dead people collected $1 billion in benefits from Medicare, Medicaid, Social Security, and other government programs. Maybe they should be called the Grateful Dead. But a lot of living people get much more government benefits they’re not entitled to according to website Zero Hedge. Take a look at these statistics.
*College students were overpaid by nearly $6 billion in Pell Grants and student loans last fiscal year. Approximately 4% of all such payments were improper and that number could be even higher this year.
*Social Security recipients were overpaid by $10 billion. Six million active Social Security numbers belong to people aged 112 and older. Certainly at their age they could use the money, but there’s just one problem: according to Wikipedia there are only 15 people in the US who have reached this milestone;
*Millions of low-income families were overpaid a total of $18.4 billion in Earned Income Tax Credit. The government overpaid $1 in every $4 to these recipients.
*Medicare and Medicaid improperly paid $85 billion in benefits. Medicaid acknowledged overpaying recipients by $36 billion, while Medicare said their overpayments amounted to $31 billion, bringing the combined total to $67 billion.
Here, There And Everywhere
Adam Andrzejewski is the CEO and founder of OpenTheBooks.com, one of the largest private databases of government spending in the world. Andrzejewski recently wrote in Forbes something that is even more shocking; he claims that since 2004, 20 large federal agencies admitted to improperly spending $1.2 trillion.
The formal definition of improper payments is “payments made by the government to the wrong person, in the wrong amount, or for the wrong reason.” In plain English it means paying money to recipients who have no right to that money.
$1.2 trillion is a mind-boggling amount – it’s nearly one quarter of President Trump’s $4.7 trillion budget for 2020. $140 billion of this amount went to improper payments last year or, putting this another way, almost $12 billion each month.
Waste Not, Want Not
In 2011, President Obama signed the Affordable Care Act. The cost of this bill in 2018 was nearly $700 billion, but even back in 2011 it was obvious that this would be a very expensive piece of legislation. At the time Congress said that it would pay for it by eliminating waste, corruption, and fraud.
Unfortunately, those good intentions have never materialized. In 2011, the improper payments made in the government’s various health programs alone totaled a combined $64 billion. By last year that number had spiraled to $85 billion.
Considering the magnitude of these numbers, a whole lot of people are smiling all the way to the bank, and they come from all areas of society. For example, they include some doctors who had lost their medical licenses to practice but who were nevertheless being paid by the government, and farmers who were overpaid $242 million on crop subsidies.
They also include some people receiving unemployment, who got $3.6 billion in overpayments from the Dept. of Labor through programs administered by states. Even the Pentagon overpaid $1.2 billion on retirement, travel pay, health benefits, and other programs for its employees.
The $140 billion made on improper payments last year – how could they have been put to better use? One way is by not spending it; there’s more than enough debt already.
But since it had been spent it could have been better used by making life easier for the growing legions of homeless in cities all around the country, for the elderly who can’t manage on their Social Security benefits, for the people who are sick but can’t afford to purchase medication they need, or to assist in many other worthy causes.
Managing an agency with a budget that reaches well into the tens of billions of dollars is a Herculean task; even trying to manage a household budget at times is quite challenging. Certainly, great efforts are made to eliminate waste and certainly there have been great successes along these lines. Unfortunately, not enough.
No one should expect a perfect record when dealing with such vast amounts of money. Corruption, fraud, and overbilling are not new, nor are they limited to Washington. And they will never be eliminated entirely.
According to the Office of Management and Budget, doing audits to retrieve overpayments are expensive to the point of being counterproductive; the costs of getting back money is greater than the amount that can be retrieved.
Unfortunately, there is no quick or easy solution to this very costly problem. This is one of those situations where efforts to make things better only make them worse. Meanwhile, taxpayers keep footing the bill.
Sources: forbes.com; openthebooks.com; zerohedge.com.
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.