Improper Payments Jumped $125 Billion For Federal Government Last Year

The federal government lost ground last year in reducing improper payments from programs such as Medicare, Medicaid and tax credits for the working poor, experiencing a nearly 18 percent increase in the costs.

A report this week from the Government Accountability Office said the U.S. government forked over an estimated $124.7 billion to ineligible recipients in 2014, representing the first jump in four years.

The highest amount for the Obama administration occurred in 2010, with an estimated $125.6 million in losses.

Medicare reported the highest number of improper payments last year, with the program accounting for nearly $60 billion in incorrect disbursements. Rounding out the top three were the Earned Income Tax Credit with $17.7 billion in lost revenue and Medicaid at $17.5 billion.

“With outlays for major programs, such as Medicare and Medicaid, expected to increase over the next few years, it is critical that actions are taken to reduce improper payments,” the report said.

However, the GAO also said federal agencies “continue to face challenges, such as statutory limitations and compliance issues” in stemming the losses.

Congress has taken steps in recent years to address improper payments, namely through legislation from 2002 that requires agencies to report how much the problem costs the government. Agencies must also try to recoup the incorrect disbursements and take action to reduce them under a pair of amendments enacted during the Obama administration.

Some efforts to fix the problem have raised created controversy. A Washington Post report last year revealed that the Social Security Administration and Treasury Department have intercepted taxpayers’ refunds to settle their parents’ decades-old debts, raising questions about whether the practice is just.

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