Can we really afford Obama? With all the wasteful goverment spending already running rampant, can we really afford for Obama to increase the size of our goverment and all of it's programs? I would argue that we can not. The goverment is already spend crazy, and below is a list of just ten examples of the goverments terrible fiscal practices.

The follwoing information is from, and all sources are listed at the bottom of this post.

1. The Missing $25 Billion
Buried in the Department of the Treasury’s 2003 Financial Report of the United States Government is a short section titled “Unreconciled Transactions Affecting the Change in Net Position,” which explains that these unreconciled transactions totaled $24.5 billion in 2003.
The unreconciled transactions are funds for which auditors cannot account: The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately, the Treasury report con­cludes that locating the money is “a priority.”

The unreconciled $25 billion could have funded the entire Department of Justice for an entire year.

2. Unused Flight Tickets Totaling $100 Million
A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused.

Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. The department would purchase the ticket directly and then inex­plicably reimburse the employee for the cost of the ticket. (In one case, an employee who allegedly made seven false claims for airline tickets professed not to have noticed that $9,700 was deposited into his/her account). These additional transactions cost taxpayers $8 million.
This $108 million could have purchased seven Blackhawk helicopters, 17 M1 Abrams tanks, or a large supply of additional body armor for U.S. troops in Afghanistan and Iraq.

3. Embezzled Funds at the Department of Agriculture
Federal employee credit card programs were designed to save money. Rather than weaving through a lengthy procurement process to acquire basic supplies, federal employees could purchase job-related products with credit cards that would be paid by their agency. What began as a smart way to streamline government has since been corrupted by some federal employees who have abused the public trust.

A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil­lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

The USDA has pledged a thorough investigation, but it will have a huge task: 55,000 USDA credit cards are in circulation, including 1,549 that are still held by people who no longer work at the USDA.[4]

4. Credit Card Abuse at the Department of Defense
The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern­ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

5. Medicare Overspending
Medicare wastes more money than any other federal program, yet its strong public support leaves lawmakers hesitant to address program effi­ciencies, which cost taxpayers and Medicare recip­ients billions of dollars annually.

For example, Medicare pays as much as eight times what other federal agencies pay for the same drugs and medical supplies.[6] The Department of Health and Human Services (HHS) recently com­pared the prices paid by Medicare and the Depart­ment of Veterans Affairs (VA) health care program for 16 types of medical equipment and supplies, which account for one-quarter of Medicare’s equip­ment and supplies purchases. The evidence showed that Medicare paid an average of more than double what the VA paid for the same items. The largest difference was for saline solution, with Medicare paying $8.26 per liter compared to the $1.02 paid by the VA.[7] (See Table 1.)

These higher prices not only cost the program more money, but also take more money out of the pockets of Medicare beneficiaries. In 2002, senior citizens’ co-payments accounted for 20 percent of the $9.4 billion in allowed claims for medical equipment and supplies.[8] Higher prices mean higher co-payments.

Medicare also overpays for drugs. In 2000, Medicare’s payments for 24 leading drugs were $1.9 billion higher than they would have been under the prices paid by the VA or other federal agencies. Although Medicare is supposed to pay wholesale prices for drugs, it relies on drug manu­facturers to define the prices, and manufacturers have strong incentives to inflate their prices.[9]

Nor are inflated prices for drugs and supplies the most expensive examples of Medicare’s inefficien­cies. Basic payment errors—the results of deliber­ate fraud and administrative errors—cost $12.3 billion annually. As much as $7 billion owed to the program has gone uncollected or has been written off.[10] Finally, while Medicare contracts claims pro­cessing and administration to several private com­panies, 19 cases of contractor fraud have been settled in recent years, with a maximum settlement of $76 million.[11]

Putting it all together, Medicare reform could save taxpayers and program beneficiaries $20 bil­lion to $30 billion annually without reducing ben­efits. That would be enough to fund a $3,000 refundable health care tax credit for nearly 10 mil­lion uninsured low-income households.

6. Funding Fictitious Colleges and Students
In 2002, the Department of Education received an application to certify the student loan participa­tion of the Y’Hica Institute in London, England. After approving the certification, the department received and approved student loan applications from three Y’Hica students and disbursed $55,000.

The Education Department administrators over­looked one problem: Neither the Y’Hica Institute nor the three students who received the $55,000 existed. The fictitious college and students were created (on paper) by congressional investigators to test the Department of Education’s verification pro­cedures. All of the documents were faked, right down to naming one of the fictional loan student applicants “Susan M. Collins,” after the Senator requesting the investigation.[12]

Such carelessness helps to explain why federal student loan programs routinely receive poor man­agement reviews from government auditors. At last count, $21.8 billion worth of student loans are in default, and too many cases of fraud are left undetec­ted.[13] Tracking students across federal programs, verifying loan application data with IRS income data, and implementing controls to prevent the dis­bursement of loans to fraudulent applicants could save taxpayers billions of dollars.

7. Manipulating Data to Encourage Spending
The Army Corps of Engineers spends $5 billion annually constructing dams and other water projects. Yet, in a massive conflict of interest, it is also charged with evaluating the science and eco­nomics of each proposed water project. The Corps’ “strategic vision” calls on managers to increase their budgets as rapidly as possible, which requires approving as many proposed projects as possible.
[14] Consequently, the Corps has repeatedly been accused of deliberately manipulating its economic studies to justify unworthy projects.

Investigations by the GAO, The Washington Post, and several private organizations have found that Corps studies routinely contain dozens of basic arithmetic errors, computer errors, and ridiculous economic assumptions that artificially inflate the benefits of water projects by as much as 300 per­cent.[15] In one case, a study’s authors inflated a project’s benefits by using a 2.5 percent interest rate that dated back to 1954. In many cases in which the Corps calculated that a project would be a net benefit, arithmetic corrections revealed that the costs would be many times greater than the bene­fits.[16] By that point, of course, the unnecessary and wasteful project is often underway and cannot be stopped.

These errors appear to reflect more deception than sloppiness. A Washington Post investigation uncovered managers ordering analysts to “get cre­ative,” to “look for ways to get to yes as fast as pos­sible,” and “not to take no for an answer.” After a public outcry, in 2002, the Corps suspended work on 150 projects to review the economics used to justify them.[17] However, given the combination of Congress’s thirst for pork-barrel projects and the Corps’ built-in incentives to approve projects that will increase its budget, real reforms seem unlikely.

8. State Abuse of Medicaid Funding Formulas
Significant waste, fraud, and abuse pervade Medicaid, which provides health services to 44 million low-income Americans. While states run their own Medicaid programs, the federal govern­ment reimburses an average of 57 percent of each state’s costs.
This system gives states an incentive to overre­port their Medicaid expenditures in order to receive larger federal reimbursements. Not sur­prisingly, the GAO has identified state schemes that shift money between state accounts to create an illusion of higher Medicaid expenditures. Simi­larly, some states have spent their federal Medicaid dollars on non-Medicaid purposes. Tight state budgets like those experienced by most states today have increased the pressure to use such deceptive tactics.

The GAO and the HHS Inspector General have also uncovered some states’ practice of recovering improper payments, retaining the funds, and then spending them on unrelated programs—a practice that costs the federal government well over $2 bil­lion per year. Congress could enact legislation to prohibit these actions more effectively.
Minor reforms enacted by HHS in 2001 and 2002 are expected to save Medicaid $70 billion over the next decade. A small sample of financing schemes uncovered in a few states suggests that, if Congress acts, even larger savings are available.

9. Earned Income Tax Credit Overpayments
The earned income tax credit (EITC) provides $31 billion in refundable tax credits to 19 million low-income families. The IRS estimates that $8.5 billion to $9.9 billion of this amount—nearly one-third—is wasted in overpayments.

The complexity of the EITC law leads to many of these mistakes. Calculating the credits is more complex than calculating regular income taxes. While the credit amount depends on the number of children in a household, the tax code does not clearly define how a child qualifies for the credit. In addition, fraud and underreporting of income are common, and the IRS lacks the resources to verify the qualifications of all EITC claimants.

Efforts are being made to address this prob­lem, but Congress can do more by requiring bet­ter verification of incomes and by clearly defining the standards by which a child qualifies for the EITC.[19]

10. Redundancy Piled on Redundancy
Government’s layering of new programs on top of old ones inherently creates duplication. Having sev­eral agencies perform similar duties is wasteful and confuses program beneficiaries who must navigate each program’s distinct rules and requirements.

Some overlap is inevitable because some agen­cies are defined by whom they serve (e.g., veterans, Native Americans, urbanites, and rural families), while others are defined by what they provide (e.g., housing, education, health care, and economic development). When these agencies’ constituencies overlap, each relevant agency will often have its own program. With 342 separate economic devel­opment programs, the federal government needs to make consolidation a priority.

Consolidating duplicative programs will save money and improve government service. In addi­tion to those programs that should be eliminated completely, Congress should consolidate the fol­lowing sets of programs:

342 economic development programs;

130 programs serving the disabled;

130 programs serving at-risk youth;

90 early childhood development programs;

75 programs funding international education, cultural, and training exchange activities;

72 federal programs dedicated to assuring safe water;

50 homeless assistance programs;

45 federal agencies conducting federal crimi­nal investigations;

40 separate employment and training pro­grams;

28 rural development programs;

27 teen pregnancy programs;

26 small, extraneous K–12 school grant pro­grams;

23 agencies providing aid to the former Soviet republics;

19 programs fighting substance abuse;

17 rural water and waste-water programs in eight agencies;

17 trade agencies monitoring 400 interna­tional trade agreements;

12 food safety agencies;

11 principal statistics agencies; and

Four overlapping land management agencies.[20]


[1]Formerly known as the U.S. General Accounting Office.
[2]See U.S. Department of the Treasury, 2003 Financial Report of the United States Government, pp. 126, at 03frusg.html (March 28, 2005). Unreconciled transactions totaled $3.4 billion in 2004.
[3]U.S. General Accounting Office, DOD Travel Cards: Control Weaknesses Led to Millions of Dollars in Unused Airline Tickets, GAO–03–398, March 2004, at
[4]U.S. Department of Agriculture, Office of Inspector General, Headquarters Audit Report, “Adequacy of Internal Controls over the Individually Billed Travel Card Program,” Report No. 50601–05–HQ, June 19, 2003, at 50601-05-HQ.pdf (March 28, 2005).
[5]U.S. General Accounting Office, Travel Cards: Air Force Management Focus Has Reduced Delinquencies, But Improvements in Controls Are Needed, GAO–03–298, December 20, 2002, p. 4, and “Travel Cards: Control Weaknesses Leave Navy Vulner­able to Fraud and Abuse,” testimony before Committee on Government Reform, U.S. House of Representatives, GAO–03– 148T, October 8, 2002, p. 8.
[6]Janet Rehnquist, Inspector General, U.S. Department of Health and Human Services, testimony before the Subcommittee on Labor, Health and Human Services, and Education, Committee on Appropriations, U.S. Senate, June 12, 2002, at (March 28, 2005).
[8]Dara Corrigan, Acting Principal Deputy Inspector General, U.S. Department of Health and Human Services, testimony before the Committee on the Budget, U.S. House of Representatives, July 9, 2003.
[10]David M. Walker, Comptroller General of the United States, “Federal Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds,” testimony before the Committee on the Budget, U.S. House of Representatives, June 18, 2003.
[11]Corrigan, testimony before House Committee on the Budget.
[12]U.S. General Accounting Office, Department of Education: Guaranteed Student Loan Program Vulnerabilities, GAO–03–268R, November 21, 2002.
[13]Walker, “Federal Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds.”
[14]Michael Grunwald, “An Agency of Unchecked Clout,” The Washington Post, September 11, 2000.
[15]Michael Grunwald, “GAO Details Errors in Army Corps Project,” The Washington Post, June 11, 2002.
[16]Grunwald, “An Agency of Unchecked Clout,” and Michael Grunwald, “A Race to the Bottom,” The Washington Post, Sep­tember 12, 2000.
[17]Michael Grunwald, “50 Projects Halted for Army Corps Review,” The Washington Post, May 1, 2002.
[18]Corrigan, testimony before House Committee on the Budget, and Walker, “Federal Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds.”
[19]Walker, “Federal Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds.”
[20]Examples are drawn from Committee on Governmental Affairs, U.S. Senate, Government at the Brink, Volume I: Urgent Fed­eral Government Management Problems Facing the Bush Administration, and Government at the Brink, Volume II: An Agency by Agency Examination of Federal Government Management Problems Facing the Bush Administration, June 2001, and U.S. Gen­eral Accounting Office, Managing for Results: Using the Results Act to Address Mission Fragmentation and Program Overlap, GAO/AIMD–97–146, August 1997.[20]Formerly known as the U.S. General Accounting Office.


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