Federal ‘improper spending’ surges to $98bn

The US government wasted almost $100bn in tax dollars in fiscal 2009 – more than a third more than the year before – prompting the White House to pledge a crackdown on fraud and mistakes in federal spending.

More than half of the improper payments in fiscal 2009 were made by the Medicare and Medicaid health programmes. Mr Orszag picked out the 15.4 per cent improper payment rate in the “Medicare Advantage” scheme as particularly “troubling.” The programme filters benefits through private health insurance plans.

The most wasteful programmes in 2009 were the Earned Income Tax Credit, with a 26 per cent improper payment rate, the School Breakfast programme with a 24 per cent rate and the Department of Homeland Security grant programme with a 19 per cent rate. It was not possible to separate out the amount of waste in the $787bn stimulus package, OMB said.