The federal government is hemorrhaging $521 billion a year to fraud and improper payments, and a new report from the Foundation for Government Accountability wants you to know exactly how bad it is. That figure, which represents about seven percent of everything Washington spends annually, has added up to roughly $3 trillion in losses since 2003. Let that sink in for a second.
Liesel Crocker, the report’s author and a senior research fellow at FGA, put it bluntly. “Only five federal agencies have bigger budgets than that,” she said. The money is walking out the door through programs like Medicaid, food stamps, Medicare, the Earned Income Tax Credit, and, yes, a pandemic grant for concert venues. Because apparently keeping live music alive was a national emergency.
Crocker made sure to point out that the $521 billion is just the fraud we actually know about. Of more than 2,200 federal payment programs, only 64 are reviewed for improper payments each year. So the real number could be even worse, which is a fun thought to have while filing your taxes. The FGA report on federal fraud improper payments also notes that state-level agencies often refuse to share the enrollment and eligibility data needed to catch cheats early, which is its own special kind of obstruction. You can review the FGA fraud report findings for a full breakdown of how the money moves and where the gaps are.
Twenty-one states are flat-out refusing to cooperate with federal efforts to vet their food stamp programs for fraud. The other 29 are cooperating and are already finding ineligible enrollees collecting benefits they were never supposed to get. It’s almost like checking the list works. Meanwhile, attorneys general across the country are prosecuting more than 8,000 fraud cases, which the report describes as a “small fraction” of what’s actually happening out there.
Crocker summed up the whole ugly machine in one line: “Fraud shows up where the checks are easiest to get.” The report gave credit to President Donald Trump’s War on Fraud and other anti-fraud efforts, while making clear there’s a lot more to do. The FGA’s recommendation is direct: “Congress and states should build on President Trump’s efforts to crack down on fraud and corruption and save taxpayers billions.
The money lost to fraud was supposed to go to people who actually need it. Instead it’s going to criminals gaming a system that, in many cases, isn’t even being watched. Half a trillion dollars a year, and 21 states still won’t let the feds peek at the list. Drop your thoughts in the comments or share this on social media, because the more people who know about this, the harder it gets to ignore.
