Government Wastes More Money than You Think

If we saved only half of the $732 billion we waste, we could dump the sequester, fix our infrastructure, bolster education, and grow the economy.

Jul 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.
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.

Agency Project Amount Time Spent
Department of Agriculture Smuttynose brewery - 3 brew tanks 750,970 1 Year
Department of Agriculture Improper payments to farm producers 16,000,000 1 Year
Department of Agriculture Improper loans 208,000,000 1 Year
Department of Agriculture Alabama Watermelon Queen Tour 25,000 1 Year
Department of Defense Soccer Field in Guantanamo 750,000 1 Year
Department of Education Student Aid Scams 1,400,000,000 1 Year
Department of Energy Initiative for Proliferation Prevention (A Cold War Program) 15,000,000 1 Year
Department Of Justice Conferences 58,000,000 1 Year
Department of Labor Dropouts from Underperforming Job Programs 118,000,000 1 Year
Department of Labor Overpayments 148,000,000 1 Year
Department of Labor Consumer Fraud 14,000,000,000 1 Year
Department of Transportation Contract Mismanagement 157,000,000 1 Year
Economic Dev. Agency Fake Cyber Threat Purge 3,000,000 1 Year
FAA Oklahoma Empty Airport 450,000 1 Year
Federal Grant Book Vending Machine 35,000 1 Year
Federal Institute of Museum and Library Services Star Wars Event 365 1 Year
General Accounting Office Overlapping Programs 95,000,000,000 1 Year
General Accounting Office Bank Fees for Empty Accounts 890,000 1 Year
Health and Human Services Medicare Fraud and Abuse 115,300,000,000 1 Year
Health and Human Services Medicare Drug Cost Alignment 3,140,000,000 1 Year
House of Representatives Snacks 30,000 3 Months
Housing and Urban Dev. Pet Toothpaste & Shampoo 505,000 1 Year
Inspector General Handbook Multiple, Across Agencies 67,000,000,000 1 Year
Internal Revenue Service Employee Fraud 250,000 1 Year
Internal Revenue Service Employee Fraud 30,000 1 Year
Internal Revenue Service Blackberry/AirCard 4,800,000 5 Years
Internal Revenue Service Refund Errors 829,000,000 1 Year
Internal Revenue Service Meetings 50,000,000 1 Year
Internal Revenue Service Video Production 60,000 1 Year
Internal Revenue Service Agency Retreat 4,000,000 1 Year
Internal Revenue Service Bonuses 70,000,000 1 Year
Internal Revenue Service Improper Software Contract 500,000,000 1 Year
Internal Revenue Service Annual Tax Gap (~ $500 billion) $3 collected for every $1 in additional enforcement 300,000,000,000 1 Year
Internal Revenue Service Improper Use of Credit Cards 2,500 1 Year
National Science Foundation Robo Squirrel 325,000 1 Year
National Endowment for the Arts Circus Classes 20,000 1 Year
Pentagon Rebuilding Iraq (wasted) 8,000,000,000 10 Years
Pentagon Abrams Tanks 436,000,000 1 Year
Pentagon 64,000sqft Building that the Military Knew would not be occupied 34,000,000 Unknown
Pentagon Roll-up beef jerky development 639,884 1 Year
Pentagon/Afghanistan Afghanistan tax bill 1,000,000,000 1 Year
Pentagon/Afghanistan USAID Power Project 53,000,000 Unknown
Pentagon/Afghanistan Training Police and Security - Considered Ineffective 50,000,000 Ongoing
Pentagon/Afghanistan Construction used as chicken coop 26,000,000 Unknown
Pentagon/Afghanistan Contract money ending up in Taliban hands 360,000,000 Ongoing
Pentagon/Afghanistan USAID  100,000,000,000 Ongoing
Pentagon/Afghanistan Equipment Left Behind 7,000,000,000 1 Year
State Department Facebook "Likes" 630,000 2 Years
Tom Coburn Waste Book Minus the 12 Items Above 18,855,248,781 1 Year
U.S. Forest Service Smokey the Bear Balloons 49,447 1 Year
U.S. Park Police Missing hundreds of Military-style weapons ? ?
USAID Moroccan Pottery Classes 27,000,000 1 Year
Vice President Biden One Night in Paris 585,000 1 Night
TOTAL: 736,595,076,947