Your Family Loses $14,000 Every 10 Years to Improper Payments—Congress Must Act

Clear Facts

• Over the past decade, the federal government has made more than $1.9 trillion in improper payments, costing the average American household $14,000.
• In 2024, improper payments from government health insurance programs amounted to $88 billion, enough to cover health insurance premiums for millions of individuals and families.
• Despite legislative efforts, federal agencies continue to face no real consequences for rising improper payments, often receiving larger budgets instead.

The issue of improper payments by the federal government is a significant burden on American taxpayers, costing each household an average of $14,000 over the past ten years. This staggering figure represents about six weeks’ worth of groceries annually for the average family. The problem is widespread, affecting nearly every government program, with some programs being more egregious offenders than others.

President Donald J. Trump and Elon Musk, leading the charge with the Department of Government Efficiency (DOGE), have highlighted the need to address this issue. President Trump has referenced research from the Oval Office, emphasizing the importance of eliminating waste, fraud, and abuse throughout federal operations.

One of the most alarming examples of improper payments comes from the Farm Service Emergency Conservation Program, which in 2024, spent 45 cents out of every dollar on improper payments. Similarly, the Earned Income Tax Credit (EITC) program improperly paid out 27 cents of every dollar, totaling $15.9 billion, which equates to the annual incomes of 200,000 typical households.

Health insurance programs, including Medicare, Medicaid, Obamacare, and CHIP, contributed to $88 billion in improper payments in 2024 alone. This amount could have covered the health insurance premiums for 9.8 million individuals or 3.4 million families. Despite efforts by Congress to curb these improper payments through legislation, agencies continue to operate without facing real consequences for their failures.

Vivek Ramaswamy highlighted the issue with the Small Business Administration, noting that it “granted over 100,000 forgivable loans to individuals who were on the DNP [Do Not Pay] list, resulting in $5.3 billion of payments to recipients who may have been ineligible for federal support.” Although the SBA’s Inspector General recommended halting this practice, the agency’s leadership dismissed the proposal.

While DOGE has made strides on its own, significant and lasting reductions in improper payments require Congressional action. One proposed solution is to enhance secure data sharing by amending the Privacy Act, ensuring agencies can verify recipients’ identities and eligibility more effectively.

The establishment of a Taxpayer Integrity Office or a Fraud Czar could also play a crucial role. This entity would focus on safeguarding taxpayer dollars and minimizing waste. For it to be effective, Congress must grant it enforcement powers.

Given that federal health care programs are the largest contributors to improper payments, Congress might consider reducing states’ Federal Medicaid Assistance Percentages (FMAP) if they exceed acceptable improper payment rates. Furthermore, regular committee hearings could hold agency leaders accountable, with the threat of job loss for failing to reduce improper payments.

Ultimately, the most effective way to combat improper payments is to reduce government spending. In 2024, the federal government spent $3.8 trillion on transfer payments, or $29,000 per household. By scaling back government involvement and allowing individuals, businesses, charities, and local governments to take on more responsibilities, Congress can help mitigate improper payments and avert a potential fiscal crisis.

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