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Jamie Dupree's Washington Insider

Posted: 9:44 p.m. Wednesday, May 25, 2011

Billions and Billions 

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By Jamie Dupree

I listened in on four different Congressional hearings on Wednesday which would probably have made regular American citizens shake their heads about how the federal government spends - and loses - your taxpayer dollars.

The issue was money that gets sent out which should not - often referred to as "improper payments" - in the lexicon of government officials and members of Congress.

The first hearing dealt with tax credits available to taxpayers, as the internal tax watchdog of the Treasury Department rattled off a series of problems that are costing billions each year.

"The IRS noted that they have found that refundable credits of significant amounts attract fraud," said inspector general Russell George.

George said while most of the fraud involves the Earned Income Tax Credit, there are also losses each year from the child tax credit, adoption credit, first time homebuyers credit and more.

Much of it revolves around the problem that the IRS just can't properly check all the documentation involved in these credits.

George said the EITC sees losses of $11 to $13 billion each year; Republicans estimate over $100 billion in total losses from all of the refundable tax credits in recent years.

A second hearing I covered on Thursday was on how identity fraud was also costing taxpayers billions, as people use stolen Social Security numbers to file fraudulent tax returns.

In the last five years, the IRS estimates $14 billion has been paid out in error in fraudulent tax refunds.

One of the worst stories came from a man who said ID thieves stole the Social Security number of his daughter - who died at age five months - and then filed tax returns claiming her as a dependent to get money back from the feds.

Down the hall, one more hearing on Thursday was also on improper payments, where Obama Administration officials said they are making progress in cutting such losses.

"We are one step closer to meeting the Administration's goal of reducing improper payments by $50 billion over three years," said Daniel Werfel of the Office of Management and Budget.

Earlier in the day, the focus was on government duplication, which was the subject of a big report earlier this year by the Government Accountability Office.

The hearing again highlighted the chance to save billions by getting rid of redundant programs.

"Today’s hearing confirms what most Americans assume about their government," said Sen. Tom Coburn (R-OK).

"We are spending trillions of dollars every year and nobody knows what we are doing. The Executive Branch doesn’t know. The Congressional branch doesn’t know. Nobody knows."

And unfortunately, after covering years of these type of hearings, that's probably a very accurate assessment.

Jamie Dupree

About Jamie Dupree

Jamie Dupree is the Radio News Director of the Washington Bureau of the Cox Media Group and writes the Washington Insider blog.

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