Waste. The word that comes to mind over and over when we think of our governmental policies is waste. Billions after billions are just wasted. Seriously wasted. Like just flush-it-down-the-toilet wasted.
Why does this happen? Because our government has become a bureaucratic Behemoth monster that will eventually strangle our ability to advance on any level. This is not a Republican-esque rant about the size of government, because theirs is a misguided argument. Contrary to their belief, size does not necessarily correlate to efficiency. Just because the federal government is smaller doesn’t mean it will automatically run more effectively. Some of the largest of companies run like a well-oiled machine while some of the smallest of companies are management disasters.
It’s not about size. It’s about efficiency. If we focus on being efficient, our government will be exactly the size it needs to be.
Walmart tops the Global Fortune 500 list with $648 billion in annual revenue and Amazon is second with $620 billion. Meanwhile, the U.S. federal government collected $4.92 trillion in revenue in FY2024. The portion of that figure squandered is off the chain. From the F-35 Joint Strike Fighter – which is on track to cost American taxpayers over $2 trillion over its lifespan, leading Chairman of the House Armed Services Committee Representative Adam Smith (D-WA) to call it a “rathole” – to things like the Internal Revenue Service having to pay taxpayers over $3 billion in interest because refunds were late, waste permeates our federal government.
… and those type of things are just the tip of the iceberg. For example, the rampant fraud, waste, and abuse within Centers for Medicare & Medicaid Services (CMS) is staggering.
In 2023, Medicare spent $1 trillion to provide health care services for approximately 66 million elderly and disabled individuals. This process involved the handling of over a billion transactions. Medicaid, a joint federal-state program that finances health care for low-income and medically needy individuals, is the second largest health care program, spending around $849 billion for services provided to about 90 million people. Together, Medicare and Medicaid represented 26 percent of federal program spending in FY2023.
The U.S. Government Accountability Office (GAO) consistently warns that, “Medicare and Medicaid are complex and large programs” and, as such, the “programs are susceptible to improper payments, as well as potential mismanagement and fraud, waste, and abuse. As a result, the GAO added Medicare to its High-Risk list in 1990 and Medicaid in 2003.” In 2019, improper payments – or payments that should not have been made or that were made in incorrect amounts – totaled around $175 billion. In fact, the GAO revealed that improper payments had been “estimated to total almost $1.7 trillion government-wide from fiscal years 2003 through 2019.”
SAY WHAT? 1.7 TRILLION DOLLARS? Is this a joke? And the Chinese and Japanese governments say, “Thank you, America!”
Even though Centers for Medicare & Medicaid Services has implemented many GAO recommendations since 2019, there were still “over $100 billion in improper payments in the Medicare and Medicaid programs in fiscal year 2023. This represents 43 percent of the government-wide total of estimated improper payments that agencies reported for that year.”
The U.S. Department of Justice has filed lawsuits against insurers – including Kaiser Permanente, Elevance Health, UnitedHealth Group, and Independent Health Corporation (CVS Health/Aetna is still under investigation and Humana was originally named in the suit but settled with DOJ for $90 million) – for allegedly exploiting the Medicare Advantage program. The DOJ alleges these guys submitted invoices to Medicare that fraudulently over-diagnosed their policyholders with serious diseases, which matters because Medicare Advantage pays insurers more for sicker patients. Depending on who you listen to, these extra diagnoses cost the American taxpayer between $12-25 billion dollars in 2020 alone. Dr. James Taylor, a former coding expert at Kaiser Permanente turned whistleblower, put it this way: “The cash monster was insatiable.” The New York Times reported that “at meetings with supervisors, (Dr. Taylor) was instructed to find additional conditions worth tens of millions of dollars. ‘It was an actual agenda item and how could we get this, he said.’”
In FY2023, health care fraud – especially within Medicare, Medicaid, and TRICARE, the health care program for service members and their families – remained a leading source of False Claims Act settlements and judgments. In addition to the ongoing litigation just mentioned, The Cigna Group agreed to pay $172 million to resolve allegations that it “knowingly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees to increase its payments from Medicare” and Martin’s Point Health Care agreed to pay $22.5 million to resolve allegations that it “knowingly submitted inaccurate diagnosis codes for its Medicare Advantage Plan enrollees that were not supported by the patients’ medical records to increase reimbursements from Medicare.” Jeez. These guys truly have no shame.
Unfortunately, this is not a one-off in our federal government. It’s the modus operandi for practically every single agency and department, and it’s been happening for decades. To demonstrate just how long this has been going on, let’s go back in time 13 years to FY2012, because it’s one of the craziest examples and we all know it hasn’t gotten any better. If anything, it’s gotten much worse.
In FY2012, there were at least 92 federal programs designed to help lower-income Americans, for a combined cost of $799 billion to the American taxpayer. This included 28 education and job-training programs ($94.4 billion), 17 different food-aid programs ($105 billion), and over 22 various housing programs ($49.6 billion). There were seven federal agencies involved in “Education and Job Training” and seven involved in the category called “Social Services.”
There are many glaring red flags in that last paragraph, but the most egregious is that is shows just how incredibly inefficiently the federal government does things. Inefficient is not even the right word – we need an entirely new word for what this is. Seven separate agencies administering 28 different employment and training programs, with practically zero coordination between them? This is beyond absurd. It is imperative that we reorganize this mess and use our resources more effectively. The overlap alone is wasting so, so, so much money.
The examples of waste are endless. Earlier, we talked about the Pentagon so let’s take a closer peek under that extremely bloated hood. In 2015, consultants from management consulting firm McKinsey and Co. and members of the Defense Business Board – a group that provides senior leaders at the Department of Defense (DoD) independent advice on business management issues – found that DoD could save $125 billion over five years... an assertion that inherently implied there was $125 billion being wasted there. The report revealed the Pentagon was spending almost a quarter of its then $580 billion budget on overhead and operations (think accounting, human resources, logistics and property management), and that the agency was paying 1,014,000 contractors, civilians and uniformed personnel to fill administrative-type jobs in support of just 1.3 million active-duty troops, the fewest number of troops in 75 years.
Even though the study was commissioned by Deputy Defense Secretary Robert O. Work, Pentagon leaders ultimately buried the results, placing secrecy restrictions on it and removing it from its website …. which is strange because members of the Defense Business Board warned them about the possible ramifications from the start. The Washington Post reports that Kenneth Klepper, the former chief executive of Medco Health Solutions, told Work that he was “about to turn on the light in a very dark room” and that “all the crap was going to float to the surface and stink the place up.” To which Work replied, “Do it.”
After seeing the jarring results of the study, however, Work changed his tune, saying “We will never be as efficient as a commercial organization. We’re the largest bureaucracy in the world. There’s going to be some inherent inefficiencies in that” – a statement that was not encouraging for those of us who hope for a more efficient Defense Department. The final report included a “clear path” for savings but stressed that it should be achieved not through civil servant or military personnel layoffs but by focusing on streamlining bureaucracy, offering early retirements, reducing the number of high-priced contractors, and embracing information technology.
Typically, eight years after the McKinsey/Defense Business Board report was released, little had changed. A 2023 report from the Government Accountability Office said that the DoD – one of the “nation’s largest employers, with almost 3 million military and civilian employees and $205 billion in contracts for services” – continued to “face considerable challenges in the management of its workforce.” The report revealed that 95 of the GAO’s recommendations had yet to be implemented which, according to their analysis, could result in an estimated $8 billion to $100 billion cost-savings, with a median estimate of $36 billion.
And that’s just the administrative-type stuff. The Government Accountability Office also finds things like this: “In 2014, Congress authorized the creation of the Iraq Train and Equip Fund (ITEF) to provide equipment and other assistance to Iraq’s security forces, including the Kurdistan Regional Government forces, to counter the expansion of the Islamic State of Iraq and Syria. As of December 2016, DoD had disbursed about $2 billion of the $2.3 billion Congress appropriated for ITEF in fiscal years 2015 and 2016 to purchase, for example, personal protective equipment, weapons, and vehicles for these forces.” However, the Pentagon had no idea where many of these shipments ultimately landed. According to the GAO, “DoD could not fully account for ITEF-funded equipment transfers because of missing or incomplete transfer documentation. Without timely and accurate transit information, DoD could not ensure that the equipment had reached its intended destination, nor could program managers conduct effective oversight of ITEF-funded equipment.”
That’s actually pretty hard to believe. But wait! Of course, there are plenty of other chronic issues. A special 2013 report from the news agency Reuters revealed that pay errors in the military are widespread: