Tag Archive for Government Waste

$ 70 Million More Down the Drain Every Year

Michigan Triples Down On The Most Abused Federal Program

Flushing-Money

The U.S. Government Accountability Office released its FY 2014 estimates of improper payments made by the Federal Government in testimony before the U.S. Senate’s Committee on Homeland Security and Government Affairs on Monday. The Improper Payments Information Act of 2002 and the Improper Payments Elimination and Recovery Act of 2010 require Federal Executive Branch agencies to estimate the levels of improper payments in all Federal programs. The GAO assembles this data and reports the levels of improper payments, along with recommendations to minimize such improper payments.

At the Federal level, all improper payments amounted to about $ 125 billion dollars in FY 2014. Even by casual Federal accounting standards this is breathtaking.  Three cents of every Federal Government dollar spent. Going through the GAO’s estimates by program, the Earned Income Tax Credit is at the top of the list by percentage of improper payments: 27.2 % of all EITC payments are improper. The GAO estimated FY 2014 improper EITC payments by the Federal Government alone amounted to $ 17.7 billion dollars. Other Federal programs burned more dollars, but none had the percentage rate of improper payments that the EITC has. Not even close.

The most obscure element of the tax increase package which Michigan voters will be asked to approve on May 5th is Senate Bill 847 of 2014. This bill is a $ 260 million annual increase in the State of Michigan’s version of the EITC. The EITC will increase from its current 6 %, to 20 %, of the Federal EITC credit allowed under Section 32 of the Internal Revenue Code. Currently, the Michigan EITC pays out about $ 80 million from the Michigan Treasury every year at the 6 % rate.

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