The federal government wastes most taxpayer dollars, not only by making poor or fradulent spending decisions, but also by funding inefficient entitlement programs and unnecessarily redistributing wealth, argues Heritage Foundation budget economist Romina Boccia.
“Any Social Security check going to a millionaire, I call that government waste,” Boccia told The Daily Caller News Foundation. “If we decide that the government has a role to protect the elderly and disabled from destitution, if we think that a federal role is required there, then sending Social Security checks to millionaires is a waste.”
Much attention is given to wasteful discretionary spending on things like completely unnecessary bridges or lavish parties for bureaucrats, and a 2014 Gallup poll showed Americans believe the government wastes 51 cents of every dollar, Boccia points out in her new report, titled “Eliminating Waste and Controlling Government Spending.” But in terms of economic principles, most of that waste happens in the realm of mandatory spending on programs like Social Security and Medicare.
Mandatory spending now consumes two-thirds of the federal budget, and by 2030 Medicare, Medicaid, Social Security and U.S. interest payments will consume 100 percent of tax revenues, according to the Congressional Budget Office.
“Paying government benefits to people who shouldn’t receive them, and creating bad incentives for people to work less and retire earlier — that is really what we think of as waste,” Boccia told TheDCNF. “The baby boomers who don’t need their Social Security checks still take them, and they’ll live off of them, and they’ll just leave a greater inheritance to their children, who are also well off.”
She also pointed to massive waste in Medicare and Medicaid spending. ”If we want to provide health care for these people, it doesn’t mean that the government has to provide it,” Boccia said. Rather than insist the government finance and provide health care to the elderly, for example, she suggests giving them a check and allowing them to purchase health insurance in the relatively efficient private market.
Medicare and Medicaid have the highest rates of “improper payments.” Last year the federal government reported over $100 billion of improper payments to the programs, including overpaying for medical equipment and paying benefits to dead people.
“Mistargeted and poorly run entitlement programs have for years driven and continue to drive the increase in federal spending and debt,” Boccia said. “And if we include that then it makes sense that you might think that the government wastes most of the dollars it takes in.”
“Instead of just thinking about mismanagement, fraud, and stupid spending examples like RoboSquirrel,” she added, “we really ought to look at a definition of government waste that is based on economic principles.” (RELATED: San Diego State Defends Using $325,000 In Federal Tax Dollars On RoboSquirrel)