Government Wastes More Money than You Think

If we saved only half of the $788 billion we waste, we could dump the sequester, fix our infrastructure, bolster education, and grow the economy.

Printer-friendly versionPDF version
a a
 
Type Size: Small
The Fiscal Times
July 24, 2013

During last week’s celebration of Richard Cordray’s confirmation as head of the Consumer Financial Protection Bureau,President Obama said, “The financial sector was able to make huge bets with other people’s money.  And that strain of irresponsibility eventually came crashing down on all of us.”

​That same statement could easily apply to the federal government
 
Just like the banks and credit card companies now being patrolled by the CFPB, Washington has trillions of dollars at its disposal and complex forms that are almost impossible to decipher. It might make you wonder why Washington doesn’t have a single agency to monitor and expose government waste and mismanagement of our tax dollars.
 
In fact, we have several. There are 73 inspectors general at different federal agencies.  The White House contains an Office of Management and Budget that looks for ways to cut costs. The Government Accountability Office also checks expenditures. And so do legions of congressional staffers who are eager to help their bosses score political points.
 
 
But none of their scolding seems to work. Politicians always campaign on the vague promise of reducing federal bloat, yet their pet interests, lack of cohesive leadership, or lack of financial management skills usually enable the excesses. When a new report identifies wasteful spending, someone always tends to say, “It’s a mere $600 million, or, “It’s only $1 billion—a rounding error” compared to the $3.8 trillion that makes up the Federal budget.
 
We can see your eyes rolling over yet another federal agency!  But think about an agency with teeth—one led by a sole director with decision-making authority who does not depend on congressional appropriations to survive. For any shred of waste, it could extract penalties from those agencies. This is what the CFPB does. The IGs at the Pentagon and Treasury Department tend to audit bureaucratic “processes,” pick up pieces of the financial paper trail, and submit recommendations.
 
The piecemeal nature of these IG reports diffuses their impact.  More importantly, some financial audits are never done, prompting the GAO to designate the Department of Defense, which is responsible for more than half of all federal discretionary spending, as “high risk” for government finances.  The DOD is not alone:  Add to this list in 2013 the IRS, Homeland Security, NASA, federal disability programs, Medicare, Medicaid, and dozens of others and you get the picture.

Get Our FREE Newsletter

Newsletter
 
Taxpayers should think of themselves as “investors” in the United States government—the largest financial entity in the world.  Would you hire a CEO of, say, Health and Human Services—with a budget of $700+billion a year—who had no management training and financial education?  Probably not. Federal officials tend to be knowledgeable about bureaucratic processes, but not the kinds of common sense management practices that get taught at business schools.
 
 
If Congress created the ultimate government watchdog, one area that deserves a serious look is program redundancy. Last April, President Obama acknowledged the problem and proposed eliminating certain agencies that duplicated the work of others. USA Today reported, “Over the past three years, the Government Accountability Office found 162 areas where agencies are duplicating efforts, at a cost of tens of billions of dollars.”  

Last year, The Fiscal Times highlighted a GAO study that found:

• Eleven federal agencies continue to operate 94 separate initiatives to spur energy-efficient construction in the private sector.

• Nine agencies or departments lead programs to safeguard food and agricultural systems from natural disasters and terrorist attacks.

• Thirteen agencies spend a total of $30 million annually funding 15 separate financial literacy programs.

The study prompted Sen. Tom Coburn (R-OK) to tell a congressional committee, “Today’s findings are a testament to failed congressional efforts of oversight and a reminder Congress continues to shirk its duty to address even blatant areas of waste and mismanagement of taxpayer funding.”

The Fiscal Times decided to look at annual wasteful spending and mismanaged funds, with the exception of massive war expenses which could not be time stamped.  Since this was not a massive study, we probably missed a lot, and we included what some might consider one-time expenses—in particular those in Afghanistan. Nevertheless, what becomes clear is that billions of dollars – even in an incomplete snapshot – are going down the drain instead of being poured into infrastructure, education and other sorely needed programs and services.

“A billion here, a billion there.  Pretty soon you’re talking about real money,” Senator Everett Dirksen once said.  So let’s see how we’re doing, almost half a century later.

AgencyProjectAmountTime Spent
Department of AgricultureSmuttynose brewery - 3 brew tanks750,9701 Year
Department of AgricultureImproper payments to farm producers16,000,0001 Year
Department of AgricultureImproper loans208,000,0001 Year
Department of AgricultureAlabama Watermelon Queen Tour25,0001 Year
Department of DefenseSoccer Field in Guantanamo750,0001 Year
Department of EducationStudent Aid Scams1,400,000,0001 Year
Department of EnergyInitiative for Proliferation Prevention (A Cold War Program)15,000,0001 Year
Department Of JusticeConferences58,000,0001 Year
Department of LaborDropouts from Underperforming Job Programs118,000,0001 Year
Department of LaborOverpayments148,000,0001 Year
Department of LaborConsumer Fraud14,000,000,0001 Year
Department of TransportationContract Mismanagement157,000,0001 Year
Economic Dev. AgencyFake Cyber Threat Purge3,000,0001 Year
FAAOklahoma Empty Airport450,0001 Year
Federal GrantBook Vending Machine35,0001 Year
Federal Institute of Museum and Library ServicesStar Wars Event3651 Year
General Accounting OfficeOverlapping Programs95,000,000,0001 Year
General Accounting OfficeBank Fees for Empty Accounts890,0001 Year
Health and Human ServicesMedicare Fraud and Abuse115,300,000,0001 Year
Health and Human ServicesMedicare Drug Cost Alignment3,140,000,0001 Year
House of RepresentativesSnacks30,0003 Months
Housing and Urban Dev.Pet Toothpaste & Shampoo505,0001 Year
Inspector General HandbookMultiple, Across Agencies67,000,000,0001 Year
Internal Revenue ServiceEmployee Fraud250,0001 Year
Internal Revenue ServiceEmployee Fraud30,0001 Year
Internal Revenue ServiceBlackberry/AirCard4,800,0005 Years
Internal Revenue ServiceRefund Errors829,000,0001 Year
Internal Revenue ServiceMeetings50,000,0001 Year
Internal Revenue ServiceVideo Production60,0001 Year
Internal Revenue ServiceAgency Retreat4,000,0001 Year
Internal Revenue ServiceBonuses70,000,0001 Year
Internal Revenue ServiceImproper Software Contract500,000,0001 Year
Internal Revenue ServiceAnnual Tax Gap (~ $500 billion) $3 collected for every $1 in additional enforcement300,000,000,0001 Year
Internal Revenue ServiceImproper Use of Credit Cards2,5001 Year
National Science FoundationRobo Squirrel325,0001 Year
National Endowment for the ArtsCircus Classes20,0001 Year
PentagonRebuilding Iraq60,000,000,00010 Years
PentagonAbrams Tanks436,000,0001 Year
Pentagon64,000sqft Building that the Military Knew would not be occupied34,000,000Unknown
PentagonRoll-up beef jerky development639,8841 Year
Pentagon/AfghanistanAfghanistan tax bill1,000,000,0001 Year
Pentagon/AfghanistanUSAID Power Project53,000,000Unknown
Pentagon/AfghanistanTraining Police and Security - Considered Ineffective50,000,000Ongoing
Pentagon/AfghanistanConstruction used as chicken coop26,000,000Unknown
Pentagon/AfghanistanContract money ending up in Taliban hands360,000,000Ongoing
Pentagon/AfghanistanUSAID100,000,000,000Ongoing
Pentagon/AfghanistanEquipment Left Behind7,000,000,0001 Year
State DepartmentFacebook "Likes"630,0002 Years
Tom Coburn Waste BookMinus the 12 Items Above18,855,248,7811 Year
U.S. Forest ServiceSmokey the Bear Balloons49,4471 Year
U.S. Park PoliceMissing hundreds of Military-style weapons??
USAIDMoroccan Pottery Classes27,000,0001 Year
Vice President BidenOne Night in Paris585,0001 Night
TOTAL: 788,595,076,947

Editor in Chief Jackie Leo, former EIC of Reader’s Digest, Consumer Reports, and Editorial Director of ABC News’ Good Morning America, is an award-winning journalist and author. The Fiscal Times is her 4th start-up venture.