The federal government has a misspending problem, and there’s growing bipartisan interest in getting to the bottom of it. Last year, the federal government misspent $236 billion, according to federal agency estimates, including $22 billion through the Earned Income Tax Credit program.
In late October, senior Republican and Democratic members of the House Oversight and Accountability Committee wrote to the Government Accountability Office asking for the Congressional Watchdog’s help finding the root cause of federal improper payments. The members’ letter indicated frustration that decades of focus on improper payments hasn’t solved the problem.
“Witness testimonies at our hearings made clear that continuing to do the same things to address improper payments is not working and will not address growing problems,” wrote Rep. Pete Sessions and Rep. Kweisi Mfume. “We need to find and implement new solutions to prevent improper payments and
fraud across government programs,” the lawmakers wrote.
The House lawmakers’ bipartisan appeal to the Comptroller General is only the latest attempt to seek their watchdog’s help stopping waste and fraud in the federal budget. In 2022, the House Appropriations Committee directed GAO to issue quarterly reports on improper payments in hopes of getting control of the federal government’s misspending program.
One of the lessons that have become clear in GAO’s decades of oversight of improper payments is that solutions need to be focused on preventing misspending before it happens. One of the ways that the federal government has made progress has been by improving data sharing, including by establishing a Do Not Pay List and sharing the Social Security’s list of deceased people, to prevent federal agencies from sending money to people who shouldn’t receive it in the first place.
But despite these promising efforts, misspending continues every year. As the House lawmakers letter states, Congress and the federal government need to explore new solutions to prevent improper payments.
At a September hearing, Linda Miller, Co-Founder and Chair, Program Integrity Alliance, recommended a “whole of government” approach to preventing fraud in her written testimony:
Two fundamental ideas underpin my testimony. The first is that any long-term solution requires an ambitious focus on strengthening fraud prevention, and in particular, data-driven fraud prevention. The second is that fraud is a whole-of-government problem requiring coordinated, whole-of- government solutions. My testimony will focus on three high impact actions the Congress can take: 1) invest in agencies’ capacity to modernize their fraud prevention in the digital age 2) establish a centralized, whole-of-government approach to accelerate the use of data for fraud prevention; and 3) pass future-ready legislation that advances the use of data to prevent fraud.
While there are many reforms needed to prevent fraud and improper payments, a unique opportunity exists to strengthen program integrity and prevent fraud, while also improving the way that low-income Americans access federal benefits. In a recent report, Avik Roy, Michael Tanner, and I described one potential solution: establishing a federal digital identity–backed by a secure, encrypted technology–to help the American people access benefits easily while introducing real identity verification into the process.
This approach would have the benefit of providing a secure and convenient way for Americans to access federal benefits while modernizing the technology and data management systems involved with federal program administration. With effective management and implementation, a federal secure digital ID could enable the federal government to prevent fraud while simplifying the benefit application and delivery process:
The United States has already made substantial progress establishing a secure way for Americans to securely access government federal and state websites and services through Login.gov, which includes more than 80 million users. Looking forward, the White House and Congress should establish a limited digital identity technology platform for certain public benefit programs to strengthen program integrity and to reduce the administrative burden that Americans encounter accessing federal benefits, including by building upon the services offered by Login.gov.
This paper, and the broader issue of program integrity and modernization, was the focus of one of FREOPP’s sessions at the recent Freedom and Progress conference in Washington, DC.
As the 118th Congress comes to a close next month and a new Congress and administration begins in January, the issues of strengthening program integrity and improving federal benefit management should be at the top of the agenda for policymakers working to make the government work better for the American people.
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