GAO Reports an Estimated $162 billion in Improper Payments Across the Federal Government in Fiscal Year 2024

WASHINGTON (March 11, 2025) GAO today issued its report on federal agencies’ improper payments estimates for fiscal year 2024, reporting that agencies identified $162 billion in payment errors. Improper payments are those that should not have been made or were made in the incorrect amount. A longstanding, government-wide issue, improper payments are a result of overpayments, inaccurate recordkeeping, fraud, or other causes. $135 billion of this year’s improper payments estimate, or roughly 84 percent, were due to overpayments. While today’s report shows a $74 billion decrease in improper payments from the previous fiscal year, GAO continues to make recommendations aimed at reducing these payment errors and safeguarding federal funds.

“Federal agencies need to tackle the massive problem of improper payments to be responsible stewards of taxpayer dollars,” said Gene L. Dodaro, Comptroller General of the United States and head of the GAO. “This issue needs heightened attention and additional actions by federal departments and agencies as well as strong Congressional oversight.”

The fiscal year 2024 improper payments estimate is based on reporting from 68 federal programs across 16 federal agencies, though 75 percent of improper payments recorded were concentrated in just five program areas. Those include Medicare, Medicaid, the Earned Income Tax Credit, Supplemental Nutrition Assistance Program, and the Restaurant Revitalization Fund. Eighteen programs reported improper payment rates of over 10 percent and six programs reported rates of over 20 percent.

The $74 billion decrease in improper payments from fiscal year 2023 is attributed to terminating or winding down certain programs, such as those specific to the COVID-19 pandemic. Eight program areas saw substantial declines in improper payments this past year. For example, payment errors under the Department of Labor’s Pandemic Unemployment Assistance program decreased by $44 billion because of the program’s termination.

Improper payments are different than fraud because they can be the result of payments made in error or for the wrong amount. Payments that are considered fraudulent involve an actor, or “fraudster,” who willfully misrepresents themselves to unfairly benefit from a government program. All fraudulent payments are considered improper, though not all improper payments are the result of fraudulent activity.

GAO has made numerous recommendations to federal agencies to help reduce payment errors, calling for better monitoring of federal programs and planning that would help identify improper payments. We’ve also raised matters for Congress to help agencies better identify susceptible programs, develop reliable methods for estimating errors, and implement effective corrective action. These include designating all new federal programs making more than $100 million in payments in any one fiscal year as susceptible to improper payments and establishing a permanent data analytics center of excellence to aid the oversight community in identifying improper payments and fraud.

The full report is available on GAO’s website.

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The Leviticus 25 Plan will eliminate literally billions of the claims filed each year for reimbursement from Medicare, Medicaid, Earned Income Tax Credit, Supplemental Nutrition Assistance Program. It will make fraud detection in these programs and others far simpler, and by orders of magnitude, more efficient, and potentially save federal, state, and local government agencies hundreds of billions of dollars annually.

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Waste Of The Day: Bank CEOs Earned Millions Before Government Bailout

ZeroHedge, Mar 06, 2025 – Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: The Federal Deposit Insurance Corporation was forced to spend $31.6 billion to protect customers at three failed banks in early 2023. While taxpayers footed the bill, the CEOs of the three banks made out nicely, each collecting millions in compensation right before their banks folded, according to a Feb. 20 report from the Government Accountability Office.

Key facts: First Republic Bank gave CEO James Herbert II $17.8 million in compensation in 2021, according to the GAO. Silicon Valley Bank awarded CEO Greg Becker $9.9 million in 2022 and Signature Bank paid $8.7 million to Joseph DePaolo the same year. 

All three CEOs had base salaries below $1.2 million but multiplied their earnings with performance-based incentives, mostly paid out as stock in the bank.

All three sold off large portions of their stock in the two years leading up to their banks’ failures, the GAO found. Between 2021 and 2023, Herbert II sold $52.9 million of his stock, DePaolo sold $39.8 million and Becker sold $30.7 million.

Herbert II and Becker were still selling stock in the first quarter of 2023, just weeks before their banks closed down. They collected $5.5 million and $3.6 million, respectively, the GAO said.

Each bank had at least four other executives earning more than $1 million per year, the GAO reported.

Background: The bank failures were the three largest in U.S. history aside from Washington Mutual’s closure in 2008. 

The FDIC had to spend $31.6 billion of taxpayer money to reimburse depositors for their losses: $16.1 billion for Silicon Valley, $13 billion for First Republic and $2.5 billion for Signature.

The FDIC also reimbursed several foreign businesses. Former vice president Mike Pence wrote in an op-ed for the Daily Mail that “Americans will also be paying to guarantee the deposits of many Chinese companies that were Silicon Valley customers. We have to stop the insanity of bailing out failing businesses.”

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

Critical quote: “You were paying out bonuses until literally hours before regulators seized your assets,” Sen. Sherrod Brown told Becker during a 2023 Congressional hearing. “Workers face consequences, executives ride off into the sunset. Only in corporate boardrooms can you run your business into the ground, take the whole economy along with you and come out ahead.”

Summary: Something is amiss when a business closure hurts the government’s finances more than it does the executives running the business.

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

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America’s hard-working, tax-paying U.S. citizens have been called upon repeatedly to fund these such bailouts, along with the TARP bailout during the GFC, and the massive direct and indirect support that major banks received during the Covid crisis years.

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“Democracy extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”   ― Alexis de Tocqueville

Behind the ObamaCare Boom – WSJ

Sweetened subsidies are attracting more takers, at taxpayer expense.

By The Editorial Board | Jan. 28, 2024 5:30 pm ET

Excerpts:

Government entitlements and subsidies invariably cost more than politicians advertise. Take the ObamaCare premium tax credits, which Democrats during the pandemic turned into a de facto public option for health insurance.

President Biden took a victory lap last week after the Health and Human Services Department reported that a record 21.3 million Americans had signed up for coverage on the ObamaCare exchanges. That’s nearly five million more than last year and nearly double as many as in 2020. “It’s no accident,” the President tooted. He’s right, but not in a good way.

The March 2021 American Rescue Plan Act sweetened the premium tax credits to make insurance on the exchanges free or nearly free for many middle-class Americans for two years. The Inflation Reduction Act extended the bigger subsidies through 2025, while his Administration rewrote ObamaCare rules to enable more families to qualify.

Because the enhanced subsidies make the plans cheaper than employer coverage, many more Americans are signing up on the ObamaCare exchanges. The pandemic Medicaid expansion also ended last spring, enabling states to remove people who no longer qualify. HHS says many who left Medicaid signed up for ObamaCare plans.

Recall that Democrats claimed that extending the sweetened subsidies for three years would cost a mere $64 billion. But a conservative back-of-the-envelope calculation based on enrollment and the average tax credit indicates that the subsidy boost this year alone will cost some $70 billion—meaning it could end up costing three times what the politicians claimed.

When the government creates an open-ended subsidy, more people than predicted always show up to the buffet. The pandemic Medicaid expansion cost more than six times the original $50 billion estimate. The Covid-era Employee Retention Credit was initially estimated to cost $55 billion, but the final price tag may be upward of $470 billion as tens of thousands of businesses continue to claim it.

The truth is that you can’t trust Congress’s budget estimates. The bipartisan tax deal now moving through the House to boost the child tax credit and renew some business tax breaks is estimated to cost $78 billion. The smart money will take the over.

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And on we go… more people dependent on government programs, more price distortion in private markets, ongoing ‘projected cost’ blowouts, ballooning federal budget deficits.

Washington Democrats (and Republicans) have America on track for credit market chaos.

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THE NATION’S UNSUSTAINABLE FISCAL PATH – Government Accountability Office

Excerpt:

The federal government faces an unsustainable fiscal future. In February 2025, we released our annual report on the nation’s fiscal health, highlighting both short-term and long-term risks. 

Federal debt held by the public (that is, the total amount of money that the federal government owes to its investors) will continue to grow faster than the economy, which is unsustainable.

Federal debt held by the public—past, present, and future

Historically, debt has decreased during peacetime and economic expansions. But this pattern has changed in recent decades. Unless current revenue and spending policies change, by 2027 debt will reach its historical high of 106 percent of GDP, according to our simulation. If unaddressed, it will grow more than twice as fast as the economy and reach 200 percent of GDP by 2047.

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The U.S. Congress’ latest response to resolving the fiscal crisis:

A little or a lot? Conflicting targets for cuts leave budget in limbo

The House of Representatives this week narrowly approved a budget resolution after the Senate did so previously.

By Ben Whedon  |  JusttheNews  |  Apr 11, 2025

While President Donald Trump has suggested he may sign a balanced budget plan during his term, competing estimates and promises on cuts from interested parties appear to signal the government could either come close to achieving its goal or largely fail to make meaningful cuts, with little room for a moderate option.

The House of Representatives this week narrowly approved a budget resolution after the Senate did so previously. Both chambers committed to the basic framework of “one big, beautiful bill” favored by Trump to address both his tax cuts and his border proposals in the same legislation. The reconciliation process, however, will see competing parties quibble over the depth of cuts and what to target.

The Congressional Budget Office projected that the federal government would run a $1.9 trillion budget deficit in Fiscal Year 2025 and the Elon Musk-led Department of Government Efficiency (DOGE) had previously vowed to cut $2 trillion in spending to balance the budget. But Musk’s projections have dwindled of late and budget hawks in the House aim to hold Speaker Mike Johnson to his promises of major cuts, setting up a potential leadership change should he fail.

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“It’s Main Street’s Turn To Restore The American Dream” – US Treasury Secretary Warns Wall Street

ZeroHedge, Apr 09, 2025 | Via American Greatness, – Excerpts:

U.S. Secretary of the Treasury Scott Bessent laid out President Trump’s financial policy priorities for the American Bankers Association (ABA) on Wednesday, saying that Main Street America will now take priority.

Bessent speaking at the ABA’s Washington Summit, said, “For too long, financial policy has served large financial institutions at the expense of smaller ones— no more.”

The Treasury Secretary stated that, “It’s Main Street’s turn to hire workers, it’s Main Street’s turn to drive investment and it’s Main Street’s turn to restore the American dream.”

Bessent announced the Trump administration’s shift to focusing on helping Main Street businesses and consumers thrive by giving all institutions a chance to succeed, adding, “For the last four decades, basically since I began my career in Wall Street, Wall Street has grown wealthier than ever before, and it can continue to grow and do well.”

Addressing fears of a looming recession, Bessent defended Trump’s agenda of tax cuts, deregulation and trade rebalancing and noting that, 

“We want to de-leverage the government sector, re-leverage the private sector …. we can’t do it all at once, or that will cause a recession.”

Bessent added, 

“What will keep us from having a recession is making sure that the tax bill doesn’t expire, adding back 100% depreciation and then adding some of President Trump’s agenda — no tax on tips, no tax on Social Security, no tax on overtime.”

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There is one more step that America needs to take to “re-leverage” the debt-logged private sector and activate the powerful reset that millions of American families and small businesses need – a massive, public and private sector debt elimination plan.

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The U.S. Federal Reserve pays banks on the required and excess reserves they hold on deposit. The Fed is currently holding $3.262 trillion in the cash reserves.

And it is currently paying 4.40% in interest on that $3.261 trillion…

The current total annual interest payments to banks, therefore, come in at a cool $81.525 billion. And, it would be safe to assume that many or all of the ‘Systemically Important Banks’ listed below (foreign and domestic) are partakers of those generous Fed IOER payments:

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Fed IOER payments were initiated in October 2008, “primarily to maintain control over the federal funds rate and facilitate credit market interventions during the financial crisis.”

This monetary tool does nothing, however, to reduce the soaring annual Federal budget deficits, nor does it do anything to insulate hard-working, tax-paying U.S. citizens from the catastrophic effects of future ‘financial crises’ – which are all but inevitable with with America’s snowballing public and private debt burdens.

The Leviticus 25 Plan corrects these imbalances – generating federal budget surpluses and financial security for millions of American families.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

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US Treasury Could Default As Soon As August, CBO Warns

ZeroHedge, Mar 26, 2025 – Excerpt:

Earlier this week we pointed out the striking plunge in the Treasury’s cash balance which had averaged around $800 billion for the past 18 months, and which plunged by $480 billion in the past month.

Treasury cash down $480 billion in the past month. pic.twitter.com/uV4GDNGheO

— zerohedge (@zerohedge) March 25, 2025

Regular readers are aware of the reason for this plunge: ever since the US hit the debt ceiling in the last days of the Biden administration, the US Treasury has been unable to issue new debt and so has been forced to draw down its cash to fund day to day operations.

Obviously, there is a limit to how much longer this can continue: after all, once the cash balance hits 0, the Treasury will have to start prioritizing payments, and eventually, it may even have to delay payments of interest or repayments of principal… better known as default.

Which brings us to the latest report from the Congressional Budget Office published this morning which warned that the federal government could run out of enough money to pay all of its bills on time as soon as August if lawmakers fail to raise or suspend the debt limit, to wit:

The Congressional Budget Office estimates that if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will probably be exhausted in August or September 2025. The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from CBO’s projections. (source)

On Monday, the Bipartisan Policy Center said that according to public data the Treasury will be forced to start defaulting on obligations sometime between mid-July and early October.

The CBO also cautioned that if the government’s borrowing needs are “significantly greater than CBO projects, the Treasury’s resources could be exhausted in late May or sometime in June, before tax payments due in mid-June are received or before additional extraordinary measures become available on June 30.”

The date is uncertain because of the unpredictable nature of tax receipts, and Rep. Jason Smith of Missouri, chair of the House Ways and Means Committee, said earlier this month that it could come as early as mid-May.

Henrietta Treyz, director of economic policy at Veda Partners, wrote in a Monday note to clients that an earlier “x date” would be beneficial to House Republicans and those rooting for the Trump tax plan to be initiated in a single piece of legislation as soon as possible.

The Treasury Department has been using special accounting maneuvers since Jan. 21 to avoid breaching the $36.1 trillion debt ceiling, which kicked in at the start of the year. But the department has yet to offer specific guidance on when those measures will be exhausted.

Full article: https://www.zerohedge.com/economics/cbo-warns-us-treasury-could-default-soon-august

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It is time to enact a massive debt-elimination budget clean-up operation. And there is one comprehensive plan with the raw power to make it happen.

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March 2025 quote:  ““A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.

On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.  Though a by-product of freedom, greater equality is not an accident.  A free society releases the energies and abilities of people to pursue their own objectives.

It prevents some people from arbitrarily suppressing others.  It does not prevent some people from achieving positions of privilege, but so long as freedom is maintained, it prevents those positions of privilege from becoming institutionalized; they are subject to continued attack from other able, ambitious people.  Freedom means diversity but also mobility.  It preserves the opportunity for today’s disadvantaged to become tomorrow’s privileged and, in the process, enables almost everyone, from top to bottom, to enjoy a fuller and richer life.”   – Milton Friedman

The Leviticus 25 Plan is the only economically viable, politically feasible plan on the table anywhere in the world — to clean up paralyzing debt burdens and revitalize real, non-debt driven, economic growth.

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WSJ: DOGE Won’t Be Enough to Get the Federal Budget Under Control

Discretionary spending represents only 16% of the federal budget. We can’t avoid entitlement reform.

By James A. Baker III and John W. Diamond

The Wall Street Journal | Feb. 24, 2025 – Excerpts:

Government debt has exceeded $36 trillion and continues mounting, with no end in sight. This is unsustainable absent dramatic changes in how we allocate our tax dollars.

Budget hawks have been rare in Washington since 2010, when the bipartisan Simpson-Bowles commission put forth a comprehensive plan to reduce spending and increase revenue, only to see it sink. Today, the problem is dire. Our ratio of federal debt held by the public to gross domestic product has grown from 61% in 2010 to 100% this fiscal year. Left uncorrected for another four years, we will surpass the historic high of 106% that America hit at the end of World War II.

It’s little wonder that more Republicans and Democrats are voicing concerns that American global power—backed by economic strength—is threatened by growing budget deficits. It’s time lawmakers seek solutions rather than argue about who’s to blame.

Several factors drive deficit spending, including an aging population and rapidly rising medical costs. But the major reason is reckless spending.

President Trump deserves credit for trying to make the federal bureaucracy more efficient to reduce deficits. His decision to create the Department of Government Efficiency put a much-needed brake on wasteful government spending.…

…[T]here are many steps the administration and lawmakers can take. The nondefense discretionary spending that DOGE has focused on is only 16% of the federal budget. If DOGE reaches its goal of reducing spending by $500 billion, the budget deficit for the year will be reduced by about 26%. That’s a good start. But our leaders must also develop plans to control spending on entitlement programs, because those will be the primary source for our deficits in the coming decades.

America can’t achieve a sustainable budget without reforming Social Security, Medicare and other healthcare benefits. Together, these accounted for 49% of federal spending last year, and the share is growing over time.

Meanwhile, these programs are hurdling toward insolvency. Social Security is projected to be insolvent by 2034. Unless Congress and the White House enact reforms by then, there will be a 23% reduction in benefits. Similarly, Medicare Part A is projected to exhaust its trust fund by 2036, requiring an 11% cut in benefits.…

….We’re about two presidential terms away from the Social Security and Medicare trust fund exhaustion dates. Fortunately, that’s plenty of time to identify solutions that can attract bipartisan support. Republicans and Democrats must work together to form bipartisan commissions to begin studying solutions.

Given the current political climate in Washington, it would be wise for such commissions to keep their thoughts as confidential as possible until the time comes to release a final set of recommendations. The reasoning for doing so is straightforward: Political foes are quick to use any mention of a potential solution as an immediate campaign slogan.

If America fails to act, debts will grow as deficits add up and interest payments balloon to unprecedented levels. Inflation will surge again. Such an outcome will reduce the nation’s economic vitality, impose a hardship on the least-affluent Americans most affected by inflation, and strip the U.S. of the flexibility needed to respond to economic crises and existential foreign policy challenges.

Mr. Baker served as White House chief of staff (1981-85 and 1992-93) Treasury secretary (1985-88) and secretary of state (1989-92). Mr. Diamond is senior director of the Center for Tax and Budget Policy at Rice University’s Baker Institute for Public Policy.

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The Leviticus 25 Plan will eliminate enormous sums of Household Debt for millions of American families, at the same time, helping to lift millions of Americans up and out of poverty.

The Leviticus 25 Plan will dramatically reduce federal (and state) government outlays and generate budget surpluses:

 Federal Income Tax recapture during each year of the initial 5-year activation period (2026-2030): $274.8 billion

Means-tested Welfare entitlement spending recapture during the 5-year target period (2026-2030): $3.153 trillion.

Total Medicaid/CHIP recapture (2026-2030): $2.026 trillion.
 
Total Medicare spending recapture (2026-2030):  $1.906 trillion.

VA Healthcare total recapture (2026-2030):  $239.472 billion

TRICARE recapture (2026-2030):  $228.0 billion.

Social Security Disability Income (SSDI) recapture (2026-2030): $633.072 billion.

Total Interest Expense eliminated due to projected operating surpluses (2026-2030): $114.839 billion.

Federal Budget – projected average annual surplus (2026-2030): $36.568 billion per year.

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