SEARCH BLOG: ECONOMY and GOVERNMENT
There are some estimates that around 10%... maybe more... of government spending for major programs go to waste and fraud. A Cato testimony to Congress showed:
Medicare and Medicaid are rife with fraud and other types of improper payments. The Centers for Medicare and Medicaid Services estimates that Medicare made at least $48 billion in improper payments in 2010.9 That figure does not include improper payments in Part D, which auditors believe is also highly susceptible to abuse.10 Nevertheless, $48 billion amounts to more than 9 percent of total Medicare spending and nearly four times the combined profits of private health insurance companies.11 CMS also estimates that the federal government alone made $22.5 billion in improper Medicaid payments in 2010, making the combined total of improper payments in the two programs somewhere north of $70 billion per year.12 In one infamous case, a New York dentist once billed that state's Medicaid program for 991 procedures in a single day. In 2005, the New York Times reported that New York's Medicaid program "has become so huge, so complex and so lightly policed that it is easily exploited," and that "a chief state investigator of Medicaid fraud and abuse in New York City said he and his colleagues believed that at least 10 percent of state Medicaid dollars were spent on fraudulent claims, while 20 or 30 percent more were siphoned off by what they termed abuse, meaning unnecessary spending that might not be criminal."13 Some experts estimate that improper payments are even more prevalent in these programs. Harvard University's Malcolm Sparrow estimates that improper payments account for 20 percent of spending in federal health care programs.14
That suggests Medicare alone makes $100 billion in improper payments annually. The Government Accountability Office has for two decades designated both Medicare and Medicaid as posing a high risk for fraud.15Add to that the waste and fraud around military expenditures, dubious energy subsidies to unproven technologies, wasteful agricultural programs, and all manner of spending for special interests in nearly every bill that crosses the Oval Office desk... and we're beginning to talk real money.
So, here's the answer: an across-the-board reduction in SPENDING by 2% annually for the next 5 years. Not 10% all at once. 2% annually for 5 years. Let each department determine how to absorb the cuts... either through better auditing, better planning, or through better management... I like the last part. But we mean REAL CUTS, NOT CUTTING ESTIMATED INCREASED SPENDING.
Let the GAO and a consortium of private accounting firms be the watchdogs. Then we can see where the wheels are squeaking the loudest after 5 years.