Government Waste: Obama Claims $18B in Savings

Susan Walsh/AP Photo

President Obama’s campaign against wasteful government spending has saved taxpayers nearly $18 billion in 2011, the White House announced today.

Officials attributed the savings to greater oversight of Medicare and Medicaid payments, Pell Grant applications and Food Stamp distribution by federal agencies, all following a 2010 Obama executive order that mandated improved accountability.

Roughly 4.7 percent of all government payouts last year were made in error, down from 5.3 percent in 2010, according to the Office of Management and Budget.

Medicare, which federal auditors say is the source of 40 percent of all government waste, trimmed $7 billion in fee-for-service payment errors in 2011, officials said.  The improper payout rate dropped from 10.2 percent to 8.6 percent over the year.

“Through aggressive and innovative solutions being deployed by federal agencies, we are on track to meet the President’s bold directive to prevent $50 billion in payment errors by the end of 2012,” said OMB director Jack Lew in a statement.

Still, the savings announced today are a small fraction of a much larger and costlier problem.

Federal agency payouts of the wrong amount, to the wrong individuals, or for an inappropriate purpose totaled $115 billion in 2011, Lew told reporters on a conference call.

The federal government made more than $125 billion in improper payments in 2010, according to the Government Accountability Office, including $34 billion through Medicaid fee-for-service alone.

Health and Human Services Secretary Kathleen Sebelius said today the administration is launching four new pilot programs to further address Medicare waste, while proposals to address the issue put forth by Obama in his 2012 budget linger in Congress.

“We still need Congress to act on the President’s proposal,” Sebelius said. “Until Congress acts, we will continue doing everything in our power to save money on behalf of the American people.”

The White House cast today’s announcement as part of the president’s We Can’t Wait campaign, a series of unilateral, relatively modest bureaucratic actions meant to portray Obama as an active and decisive leader.