Bush seeks ways to combat improper payments

Improper Payments

President Bush will include measures in his fiscal 2007 budget proposal to combat the $37.3 billion in improper federal payments made in fiscal 2005, according to a report released Feb. 2 by the Office of Management and Budget.

The report, “Improving the Accuracy and Integrity of Federal Payments,” states that the president’s proposals would save more than $12 billion in a decade. In fiscal 2005, improper payments fell from $45 billion to $37.3 billion. The fiscal 2007 budget plan, which Congress must approve, will be released Feb. 6.

Bush will propose incentives for states to eliminate benefit overpayments, a simplified Earned Income Tax Credit and better enforcement tools for the Social Security Administration. His budget will also propose giving state food stamp programs access to the National Directory of New Hires to verify beneficiaries’ employment status and incomes. The efforts are part of the President’s Management Agenda.

According to the report, improper payment totals have declined by 0.8 percent since fiscal 2004, and with the administration’s proposed efforts, the decline could go down by 0.2 percent in fiscal 2007.

Last year, Medicare had the highest percentage of incorrect payments, accounting for 32 percent, or $12.1 billion, of the $37.3 billion total. Earned Income Tax Credits were the second highest at 28 percent, according to the report.

The report found that improper payments under Medicare, public housing assistance and food stamp programs have decreased since 2004. But estimates show that improper payments under the Earned Income Tax Credit, Old-Age, Survivors and Disability Insurance, and Supplemental Security Income programs remain high.

The Bush administration plans to review more programs. In fiscal 2005, it added 17 programs that had $1.2 billion in errors. If Bush’s proposals go into effect, the report predicts that corrections to those programs could save the government $80 million by next year.