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  • “Improper” Entitlement Payments: Why What GAO Found Matters to National Security

    In her testimony before Congress last month, Kathleen M. King, Director of Health Care at the U.S. General Accountability Office (GAO), reported “improper payments” under the Medicare and Medicaid programs amounting to almost $70.5 billion for fiscal year 2010. According to the GAO, any payment was labeled “improper” if it “should not have been made or … was made in an incorrect amount.”

    If there were any question as to the immense size of America’s entitlement programs, this piece of news should be very illuminating.

    To put it in perspective, this amount is more than the combined spending for the Department of Homeland Security and the Department of State (excluding USAID) over the same time period.

    Or consider that these “improper” payments are some 10 times the amount Congress authorized in FY 2010 for the Missile Defense Agency for activities vital to our national security.

    King didn’t point fingers, and she did highlight efforts to try to reduce waste in the Medicare and Medicaid entitlement programs. But it’s hard to ignore how big this “improper” use of taxpayer dollars is. Basketball player LeBron James, who earns over $45 million a year, would have to work 1,567 years to earn that much.

    To restore our nation’s fiscal health, Congress must get a handle on entitlements and make hard cuts in unnecessary programs and pork. Even the Department of Defense can find waste to cut, but those savings should be plowed back into its budget to spend on what the U.S. military needs to protect our nation. Funding defense at the appropriate level to counter the threats we face is the government’s first and foremost constitutional duty.

    According to our calculations at Heritage, the yearly defense budget should average about $720 billion over the next five years. As the sheer size of the “improper” Medicare and Medicaid payments prove, such an investment in defense is not only affordable; it’s doable.
    Scott Nason currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/internships-young-leaders/the-heritage-foundation-internship-program

    Posted in Security [slideshow_deploy]

    5 Responses to “Improper” Entitlement Payments: Why What GAO Found Matters to National Security

    1. George Colgrove VA says:

      Everything needs to be cut. Whether you want to call them entitlements, programs or whatever Social Security is broke, Medicare and Medicaid is not fully funded.

      The total intake of tax dollars (including money for SS, and MC/MC) will be about $2.1 trillion or less. 36% of receipts are for these dedicated programs/entitlements ($734 billion). The FY11 budget had social insurance spending at $2.1 trillion out of a total budget of $3.82 trillion.

      We are funding SS and MC/MC with 36% cash, 64% debt. Alternatively, we are using the entire tax revenue to pay for these entitlements.

      If one were to take the dedicated tax revenue that goes to social security and Medicaid/Medicare and take that out of both mandatory spending and the total budget, the remaining budget will be funded by 56% debt.

      What this means is 56% of every federal workers paycheck is adding to the debt, 56% of every contract payment is being added to the debt. It does not matter where that money was spent, be it DoD, DHHS, DoEd, DoEn, DOT, or whatever.

      What this means is that EVERY Department will need to decrease spending by 56% to get to zero.

      Now here is the problem. Entitlements are provided to PEOPLE who have been conned into a system that has been in place for nearly 70 years! Many of which live meagerly and have zero ability to take the reins over in managing their own finances. Cutting out the fraud and waste in SS and MC/MC will not be nearly enough to bring $2.1 trillion down to $734 billion. Cuts have to be made and many will feel the pain.

      Regardless of what happens with entitlements, the rest of government will need to see "draconian" cuts. If you take out entitlements and defense, the sum left is about $600 to $700 billion, of which about $200 billion goes for interest on the debt. There is only $450 billion of discretionary spending that remains. Even if we cut 100% of this out, there still is not enough to balance the budget.

      The DoD is spending nearly double what it historically spent. In 2011 dollars, the DoD historically spends about $450 billion annually. It is recognized that figure includes massive redundancy, duplication in programs, fraud, and waste. China's annual defense budget is $98 billion and they are modernizing at a quicker rate we are at 8 times China’s costs. The US currently spends upwards of $800 billion for defense (more if you start digging around in the budget).

      To say that defense is off the table for cuts is not being honest. We as conservatives need to take command of cutting defense so that the right cuts are made. We need to preserve our MILITARY mission, by cutting back on the pentagon civilian federal workers and their duplicative, redundant, overlapping programs in all areas, be it intelligence or administrative. Do we really want DoD federal workers writing manuals on how gay soldiers kiss in public? Do we really want DoD federal workers running payroll for the department of health and human services?

      Our economic woes started to occur when ALL departments’ budgets skyrocketed in 2005-2008. We need to get spending back before the 9/11 tragedy. I think it is clear we have failed on the global front fighting terror. The world is less safe than it was $7 trillion dollars ago. We need to get back to basics. Shore up the borders and use the Chinese spending model to modernize our military. As for entitlements, it is game up for congress. They have dragged this dead body for too long. It is time to be honest with America. It is not the program we all thought it would be. Funny thing is, all of us outside the beltway know it! My only hope is that any cuts to these programs do not kick out the elderly who have been conned into this system. SS and MC/MC have to have multiple methods to get it off the backs of the taxpayers.

      The Elderly currently on the programs plus people 2 years prior to entering the program should see no changes to the program. These people need to be partitioned off and the program, though federally funded should be administered in the private sector to gain any and all efficiencies, plus be able to benefit from an efficient and reasonably compensated non-union private sector workforce.

      People up to 10 years from retiring should be put on a ramp program that is partially funded by tax dollars and part by private investments. This should also be administered by the private sector. Financial experts in the private sector can provide retirement counseling to aid this group into a more self managed system

      The rest of us should get an ELIA (Equivalent Long-term Investment Account) which takes what we paid into the system and apply a reasonable interest rate and provide us payments so that we can invest for our retirement on our own. Eventually SS will be eliminated for the fraud that it is.

      As for MC/MC – these programs need to be privatized with state government opting to pay partial premiums. The feds should pull out of these healthcare insurance programs entirely.

      EVERYTHING WILL NEED TO BE CUT. Overall federal spending is at 45%, debt and like I said after compensating for dedicated social insurance allocations, the rest of the budget is 56% debt. I don't care what the perceived importance is, it needs to be cut – across the board.

      We conservatives will have no leg to stand on if we dig our feet in the ground while asking everyone else to cut. Just not going to work. We should however, recognize BIG cuts will have to be made, and we may want to be in the driver’s seat for those cuts. At some point after we dig in too far, we may be too stuck to be able to have a seat at the table.

    2. George Colgrove VA says:

      The problem with your analysis, though from a defense spending standpoint it makes sence. In a political sence, you are saying that all savings in ridding the DoD of waste and fraud can be rolled back into defense. Merits aside, DHHS can say the same thing. More people can be helped if they roll over all the waste and fraud into adding to entitlements.

      The issue is we have SS and MC/MC and they are here to stray unless we do something to rid this nation of these burdens. If we expect them to cut, we need to cut the DoD. At the very least we shoudl not be looking for cuts in the DHHS by finding fraud and waste, then have the arogance to say that money has to be shipped to defense. We conservatives will have no credibility in this argument.

      We need to start focusing on intellegent and thoughtful cuts in the DoD as well as the DHHS. These two entities eat up almost 80% of the federal budget!

    3. Dave Aldridge, Dayto says:

      "God and the soldier we adore, in times of danger, not before. Danger past, and all things righted, God is forgotten, the soldier slighted." A Malborough (sp) veteran. Dogs and soldiers keep off the grass. I can see where O-useless is headed with this garbage. If you don't give them the stuff they need to do the job, then the next time you call on them to fix your f—-ups, they just might say," Too bad we just don't have enough planes to support that mission, Mr President." Sorry, you gutted us in 2011/12 so we don't have enough C-17's to support your new screw-up.

    4. Leon Lundquist, Dura says:

      I broke this six months ago, how "Improper Payments" were made on purpose so the false statistics can be created as the Government claws them back. The example was Food Stamps. Government gives people too much (on purpose) so that they can send the recipient a bill for the amount of Food Stamp money ruled "Improper." Then, the Administration can claim credit for being 'tough on Food Stamp abuse!' But actually, they are clawing back the cash from poor people in huge numbers. "Fraud and Abuse" mostly catches their own mistakes giving too much in the first place. The people spend it, but over time they owe Government a couple hundred bucks.

      Officially the paperwork says it doesn't matter if it was a mistake of the Government, you still have to pay back the money. So they cut your food stamps to pay back the 'improper payments.' Dept Agriculture has already used this boondoggle to prove they 'are going after Fraud and Abuse' but really they are going after innocent Americans by the tens of thousands! Now apply this to the whole Medicare and Medicaid scene! I warned they would try this Junk to pretend they are going after Waste, Fraud and Abuse! Look! Here they are, and they are really just going after Innocent Americans, but make it look good. False Report is a Federal Crime.

      Look at that $70 Billion in so called "improper payments!" I'll bet it is all about a monstrous Claw Back meant to do harm to the Doctors and Medical Businesses, the same way it does harm to Food Stamp recipients. At some point you have to see that Demolition Plutocrats are using Government to Socialize Medicine! I should point out again, it is a High Crime to establish Unconstitutional Forms of Government! Please, won't somebody get a spine and Prosecute these traitors!

    5. Bobbie says:

      I want to know what this man's job is in his words!? And I want him held accountable!!!! Obama's administration seems to fall short of serving breakfast in bed! He has a personality conflict with himself and America's way. Everything he says is controversial with distortions and spin. He talks about change and then when the dignified purposes it in regard to the fraud and corruption running social security, medicare and medicaid, all of a sudden it was these social programs that made this country great?

      No, Mr. President! Government controlled social programs doesn't make any country great! It reveals arrogant, ignorant leadership of a country great with conning weaknesses of the people, causing government oppression on the people.

      The more government control, the less freedom!

      Where government iIS outside their constitutional duties, FREEDOM ISN'T!!

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