Waste of the Day: Another $161 Billion Lost to Improper Payments

Topline: Federal agencies reported $161.5 billion in improper payments during fiscal year 2024, according to data released by the Office of Management and Budget in November.

Improper payments – does Biden care?

President Joe Biden will leave office having lost $925.7 billion to improper payments — money sent to the wrong person, for the wrong amount or the wrong reason — during his four-year term. Adjusted for inflation, Biden’s term will have lost $986.2 billion.

That’s the worst for any president since reporting began in 2004, even adjusted for inflation.

Key facts: The Centers for Medicare and Medicaid Services wasted $87 billion in improper payments, more than any other government entity. Medicare reimbursements to health providers had a 7.7% mistake rate this year, the worst since percentages were first reported in 2019.

Another $4 billion was sent to recipients who had issues regarding their citizenship, including $824 million in unemployment insurance from the Department of Labor.

The government also sent $346 million to dead people, mostly because the Office of Personnel Management continued to send benefits to retirees who are no longer alive. That’s the highest amount since at least 2021.

Covid-era programs continued to have some of the worst improper payment rates. Roughly 25%, or $2 billion, of loans forgiven under the Paycheck Protection Program this year were paid improperly.

The data was released on Wednesday afternoon, Nov. 27, the day before Thanksgiving, leaving little time for negative coverage before the news cycle paused. Coincidence? Probably not. The White House pulled the exact same stunt in 2023 and 2022.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com. 

Actually those bad payments did slow down

Background: Biden’s improper payment totals decreased every year he was in office.

In 2021, $281.4 billion was spent on improper payments, the highest it’s ever been. Since then, it has come down, and 2024 is the first time since 2019 that improper payment spending has dropped below $200 billion.

In 2024, 3.97% of the government’s money was lost to improper payments, the best rate since 2013. Biden leaves office with an overall mistake rate of 5.42%, slightly higher than the 4.94% mistake rate Donald Trump ended his first term with.

While the Biden administration’s payments didn’t quite reach our predicted historic $1 trillion four-year total, his term’s inflation-adjusted $986.2 billion is $139.4 billion more than Trump’s $846.8 billion, adjusted for inflation in October 2024.

Trump will now get a second chance to make good on his promise to wage a war on government inefficiency. Improper payments are one of the largest and perhaps the most egregious sources of taxpayer waste, with $3.4 trillion lost since 2004, adjusted for inflation.

Summary: When the U.S. government accidentally loses more money than most nations see in an entire year, it’s a sign that the federal budget is too high, and its execution too bureaucratic.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RCI and made available via RealClearWire.