Dir. Lew: Improper federal payments on the decline
Office of Management and Budget Director Jack Lew called a reduction in improper federal payments "good stewardship."
November 15th, 2011
04:38 PM ET

Dir. Lew: Improper federal payments on the decline

Following up on an executive order signed by the president in 2009, Obama administration officials held a conference call today to announce their progress in reducing “improper payments” made by the federal government. Totaling $116 billion in fiscal year 2011, improper payments are defined as payments made by the federal government either in the wrong amount, to the wrong person, or for the wrong reason.

“At a time when our most critical programs – economic programs, social safety net programs – are experiencing tighter and tighter budgets, it's particularly imperative that we not tolerate such errors,” Office of Management and Budget Director Jack Lew said on the call.

Today Lew announced that in FY 2011 the federal government cut improper payments by $18 billion and recaptured $1.2 billion in erroneous payments. When combined with the numbers from FY 2010, the government has prevented nearly $21 billion in improper payments and recaptured over $1.9 billion, Lew said.

Secretaries Kathleen Sebelius and Arne Duncan as well as Deputy Agriculture Secretary Kathleen Merrigan also participated in the call, outlining efforts underway at their respective agencies to reduce payments made in error.

But OMB officials urged caution in how these numbers are interpreted. The government does deem a payment improper if it has paid too much, but also if it has paid too little or even if it has simply made an error in documenting what the payment was for. Meaning that ultimately not all of the money saved or recaptured goes to paying down the deficit, or even returns to the program to which it was originally allocated.

Across the entire government, just one-third of the reduction in payment errors goes to deficit reduction, while the remainder is directed to the intended parties and activities as required by law, according to OMB. But all of the nearly $2 billion in recaptured payments from the past two fiscal years has gone back to the Treasury for deficit reduction

It’s for these reasons that Lew resisted framing this news as part of deficit reduction efforts, instead calling it “good stewardship.” Just as families across the country tighten their belts and reduce spending, Lew said the government also needs to “reduce what we spend on things like travel, cell phones, printing and nonessential items.”

“[Improper payment] is not a new phenomenon, what's new is that we're doing something about it,” Lew said.

“Congress first enacted legislation requiring the government to measure improper payments in 2002, our first error measurement government wide occurred in 2004,” said Danny Werfel, Federal Controller at OMB. “If you look at the data, particularly if you look at 2007, 2008 and 2009, you'll see the error rates increasing and apexing in 2009 at 5.4%. It's around that time that the president issued his executive order, and issued a series of directives targeted at this effort, and what we're reporting today is not only did the error rate decline in fiscal year 2010, we saw an even steeper decline in fiscal year 2011, which we believe demonstrates that these efforts are starting to take hold and have results.”

Topics: Jack Lew • OMB

soundoff (6 Responses)
  1. midleclssfan

    Yet another great job by President Obama and his Administration. To those who claim the President has not done anything, is the worst ever, is a one term president, I say the facts do not support your lies.

    November 15, 2011 at 5:31 pm |
  2. Liz Carter in Georgia

    You're right midleclssfan; so much of it's been lodged against him due to pure unadulterated hate and their daily missions to berate, degrade, demean, undermine, verbally assault and sabatoge THIS President, not only his American Family, but to the World! 'Words are mightier than the sword' some say...but lies always meet with a bad end! The truth always shows up! After while much more truth is going to come forth. I think OWS is a good example of the unadulterated truth! GO OWS! I appreciate them so much!

    November 16, 2011 at 6:46 am |
  3. jean2009

    I think this may be one of the reasons for some of the haters. Stopping government theft makes those who swindle the government by overcharging angry.
    Thanks Liz...I see OWS as a force for good by keeping the focus on what is wrong with the system.

    November 16, 2011 at 10:15 am |
  4. Bill in STL

    They have to pay for Obama care somehow .... Or maybe they are getting better at hiding this kind of theft.....

    November 17, 2011 at 10:13 pm |
    • jean2009

      We are already paying for your care....now it is time for you to be able to afford to buy your own insurance.

      I recently had a situation where my husband's handicap cart lift needed a new cable strap. Since the lift was over 10 years old, I called the company who manufactured the lift to see who would be our closest supplier. They gave me a 1.800 number for a business about 12 miles away.

      I called and talked with the owner and was told they would get back to me with a price which turned out to be a quote of $286.74. I told the lady who quoted the price that I would check other sources, and let her know. We are talking installing a nylon strap that is 1 inch wide and 10 ft long. Being a handicap lift they were planning on billing medicare...which wasn't the case.

      I called the business that originally installed the lift (about 45 miles away) and they installed the new strap in 20 minutes for $83.23. I know you are probably totally clueless about what rip-offs disabled people deal with everyday. A large percentage of those are medicare billings so you get a good idea of the rip-off being paid by the government.

      I see everyone being covered as a great move...something that has been needed for a long long time.
      Thanks to President Obama for spending his political capital to get it done.

      November 20, 2011 at 6:15 pm |
  5. Liz Carter in Georgia

    Right Jean! The 99%ers are the real America. They are the brave identifiers of the systems' long-time culprit of power and 'greed over the people' aka GOP! This vicious animal has been hiding under the cloak of 'CAPITALISM' for many decades! Even before the BUSH ERA conspiracies. THEIRS was just 'the straw that broke the camels' back'; and now they expect us to purge all of those years from our memory and blame the whole quandry of policies, which have finally come to a head and FAILED on President Obama!

    November 19, 2011 at 1:42 pm |