Congress is where we will find the most corruption. I watched a television news special showing 5 congressman taking a tax paid trip taking their spouses and kids on a government owned plane thus costing the tax payers over $21,000.00. The plane used was stated cost the government seventy-five million to buy and was available to congress anytime they deemed needed. This show disclosed the plane and tax money as being used for personal vacations deemed as necessary for the benefit of being able to see the affects of global warming of the coral reefs. What a perk at our expense. Must be nice to have a private airliner available at your disposal plus all expenses paid to vacation at the pretense of  surveying certain effects on the environment. Again this fact would not be known with the exception of the news station being made aware of it and it broadcast to us on a newscast. Would the government ever disclose this, no way.

During the Clinton Administration Congress passed a raise for the office of President of the United States to $400,00.00 per year starting with the next presidential assignment. In return the President passed a raise for Congressmen to $180,000.00 per year plus a retirement of $90,000.00 per year after leaving office. Most Americans don’t make anywhere near $90,000.00 per year working 40 hours a week, let alone having it as there retirement. This again is at the tax payers expense. Bet a lot of people didn’t know that.

A lot of people either don’t read the paper or watch the news because this is where I acquired this knowledge. Of course some people may read about it or see it on the news but just sit back and say that is how it goes and take no notion that they could do something about it. That is one reason the government is the way it is today. Everyone sits back without voicing their opinion or they don’t want to get involved. We allowed Congress to get us in a Trillion dollar debt by not keeping up with the political shenanigans. At one point in time neither the President nor Congress could actually put a Bill as active without putting it to the vote of the people. Now we rarely get to vote on any decision making. They pass the Bills and we are forced to abide by them.

Let’s look at the ban placed on cigarette ads on television. They are banned because someone in Congress decided that they entice underage children to want to smoke. They have since banned cigarette use from nearly all public places, some cases even bars and taverns. As a previous smoker I felt this was a violation of my civil rights. But Congress keeps pushing the issue until you won’t be able to smoke at all. Some states have placed into law that you can’t smoke in your car if you have a child in there with you. What happened to our freedom here. You still see ads for alcoholics beverages on television and magazines because I would venture to guess that most of the people in our government partake of alcoholic beverages. They are not going to do anything to cramp their style. I actually watched a channel on television that broadcast a session of Congress and I saw both drinking and smoking during the session. They don’t have to abide by the laws that they set down for us. I guess they are exempt. When they need more funds they raise tax on cigarettes, but I have yet to hear of them raising tax on alcohol. No way would they do something to deter their luxury. Have you ever heard of anyone wrecking a car from smoking? How many wrecks are caused by drinking? Think about it.

If anyone is really interested you may say that the local governments promote drinking of alcoholic beverages in sort of a round about way. On certain holidays the local government, even the police offer free rides to those that feel they are too intoxicated to drive. We now have made our tax supported police force into free taxi services for drinkers. But on other occasions not sponsored by this free taxi ride service you are arrested for public intoxication. Kind of a contradiction on policy here Giving free rides at one time but arresting you at other times. When the free rides are available, this encourages people to drink until they are intoxicated because they know they have free public transportation to take them home. To me this a major abuse of our precious tax money again.

Another area of very high importance to me is all the millions of dollars given to each state from the numerous lawsuits against all the tobacco industries. They stated this money was to be used to pay the high medical bills of tobacco smokers unable to pay the own medical expenses. Once the monies were received the states took it upon themselves to use the money how ever they felt fit, neglecting the medical reasons in most cases. I have read that many states used the monies to offset their own deficits. I feel that does benefit all the smokers that got hooked on cigarettes. I think it would have meant more if the money was given to the smokers that got hooked on their cigarettes anyway. The states have drastically misused this money for the wrong intentions of which it was meant for. I feel the these states that misused this money to satisfy their personal financial needs should be made to return the money either to the people or back to the tobacco companies for not fulfilling the reason for the lawsuits in the first place. I would be furious if I owned the tobacco company the paid the big monies to find it not used for the appropriate reasons. Why is the government so down on the tobacco companies and seem to turn away from the alcohol business which to me is more damaging and just as harmful and has been found to be available to minors just as much as cigarettes. What can be done about the incompetence? We the people need to speak up!

Another complaint that is focused more on the local level is the good ole property tax. When the local government finds themselves in a bind financially, they say they have to raise our property tax to restore their revenue which if studied closely is caused by wasteful spending. In my area recently they mentioned having to raise the property tax and the people actually started an uproar about it. The government put a stop to the idea but a week later a property appraiser came out, reappraised everyone’s property and low and behold I got a new property tax letter stating my property tax was going up due to the new appraisal. I changed nothing on my property to account for the raise but they got the money they wanted. Did I have a say in  the matter? Of course not I had to accept it. Now would this seem fair? No way! Is this taking unfair advantage of the people? Sure it is. Is there anything we can do? Sure, fire the lot and start over and make sure the people get a report of all spending of our tax monies. Now I heard recently that the government needs even more money so they are considering raising the tax on gasoline by ten cents on the gallon. I guess since the oil companies are making a killing in fluctuating the price of gas the government feels they can jump on this money making bandwagon. They know we have to have the gasoline to keep our vehicles running. I have never seen the government step in restricting the ceiling on the price of gasoline, maybe because they didn’t have to pay for their gas.

Why does our government allow the OPEC nations to play games with oil prices? The government needs to propose an ultimatum that when gas prices rise the price of wheat and other commodities they depend on from our country be raised accordingly. Since these nations are unable to produce the wheat and other commodities they need we hold just as much power over them as they do us with their oil. Why does our government not use this as leverage to keep gas prices down? I have no idea. Maybe this is not a big concern for them, even though it effects all our lives. Could it be that maybe our government officials never gave this a thought. And all this time we thought they were looking out for our interests.

What gives the government officials the right to think that they have the right to use our tax money to throw outlandish parties for themselves and dignitaries. Are these parties necessary? If it is a private personal affair the cost should be covered by their own money not ours. We should not have to pay for Christmas parties, New Years parties, Birthday parties or other parties of this type sponsored at the White House. If I have a private party I have to pay the expenses myself, so the President should have to do the same.

Does the President have the right to use Air Force One whenever he chooses? I know of several occasions when George W. Bush flew here to Nashville for private pleasure trips. I read where it cost over twenty-five thousand dollars at least any time it left the ground. I know he has flown here numerous times to attend award ceremonies for country music and other local commercial events. This is again at our expense. Any time the President decides to take a break and go to Camp David, again we have to pay the expense for the Presidential helicopter to fly him there. Are all of these trips necessary at our expense. Do you care that your money is being spent in this manner. I realize that he is the President and with this office comes certain perks, but shouldn’t these expenditures be in relationship to government business? Did George W Bush use Air Force One in his travels for re-election in 2004 at our expense? He made multiple trips in his re-election campaign. Did he personally pay the expense of using Air Force  One or did the good old tax payers cover this expense too, which I know had to be in the millions of dollars?

Because of security reasons, the President of the United States has his aircraft (Air Force One) and his own privately assigned helicopter. I realize it is the best interest for protection that he have the aircraft, but does that justify him using them for personal vacations and entertainment not related  to government business? Our present President Barrack Obama has in his first year in office used Air Force One on numerous vacations for him and his entire family. Some were disguised as government related trips, such as the one that allowed him to visit the great pyramids. Since the he has toured numerous overseas landmarks as well as Yosemite National Park and the Grand Canyon. You and I both know that paid for these trips through our tax dollars. Is this justifiable to you? It is not by me. Sure I would like to visit all these places but do not have the money  readily available to do so. Is this fair to use our tax dollars this way? Not by my standards.

The government says it is in debt by trillions of dollars, but they keep spending billions of dollars every time you read the paper. How can this be? I am not able to spend money that I don’t have available so how can the government?  I expressed about wasteful spending several times while working for the government and the response I got each time was that it is only money. Is that how all government officials feel? I guess they feel they can continue to spend and if need be they can always find a way to add more taxes to the citizens to make up for it. I for one am getting tired of all my money going to taxes and getting nothing in return. Does the government make available an expenditure report made available to the public to show where any of the tax money is being spent? I don’t know of any that is published and readily available showing the expenses down to the last penny. I for one would like to see a report as such to see the expenses and what they have been used for and the justification for the expense. I think this information should be made available to the press or any other person wishing to obtain it. If the government has nothing to hide then this should be no problem in supplying this information.

While we are talking about wasteful spending, take the recent presidential inauguration. The inaugural ball cost over 180 million dollars. Contributions of 40 million were taken in but our tax dollars paid the remaining 140 million dollars. How does the government feel this is justifiable to the people? How can they not feel that this kind of unnecessary spending is right. The 140 million dollars would have been better used to pay for a program to support the citizen’s welfare needs. Why do feel they have to have an outlandish ball for a new president anyway? How can a new president preach economics and then justify this type of spending from day one of his term in office? He speaks about helping the economy and the people but yet has no problem with encouraging this useless spending. The 40 million donated by contributions should have put on a pretty fancy ball in my book. To me the President is not practicing what he preaches and cheats the American public. I was not invited but yet my tax money had to pay for it. Are we going forward or falling backward into a bigger rut than we are already in now?

What is the purpose of having two parties in our government? We have the Democrats and the Republicans. I have yet to figure out the reasoning for this nor have I found any real explanation on the internet. Why are these two parties in a government that is supposed to represent all the people. With two separate parties that seem to oppose each other, how can the people truthfully be represented in a proper and fair manner. It’s like the North and South still exists only now they are represented by two political parties. If the President happens to be a Democrat and the majority of the Congress is made up of Republicans then chances are little or nothing is going to happen to benefit the country during this four year term because of the party differences. This means all these people on the government payroll got paid for doing nothing beneficial to the people. Another big waste of our precious tax dollars. In the same sense if the  President is a Republican and the majority of the Congress is Democrat we again get a stalemate. Since the government is made up of two separate parties, the naturally causes the people of this country to be divided into two parties, sounds a little like the North and South all over again. Now we not only have two separate government parties but we now too have a country divided into two parties because of this. This now accounts for the reason of the people losing interest in the government because they blame all the faults on the opposing party. Now we actually have a country not united but divided thanks to the government.  United we stand, divided we fall. A phrase used many times. I guess this nation is destined to fall.

At one point in my schooling, I was to believe that no other nation could have the authority to own land in the United States, but this is no longer true as Nissan in Tennessee owns a huge portion of property where they have their automobile producing plant owned by the Japanese. If we looked into it closely you will find a huge portion of the country is owned by businesses owned by other foreign countries. In the Nashville, Tennessee area all of the motels, hotels, laundry facilities, and small convenience stores are all owed by foreigners. Some can barely speak English. How were these people able to take over all these franchises almost overnight? Same with the overflow of Mexicans. They seemed to appear almost overnight and this is the one reason they want to change English as the designated language. Most Mexicans refuse to learn the English language or they act like they don’t know it already. I say make them learn English and speak it or else go back to their own homes where they came from. Most are illegal anyway. Why are the different governments concerned about pleasing these immigrants who have contributed absolutely nothing  to this country except to offer cheap labor.

Did you know that when we pulled out of the Vietnam War our government I guess felt so bad about withdrawing from a war we never had any intention of winning, actually brought over five hundred thousand Vietnamese to our country? The government set them up in homes, jobs and made them tax exempt. Do you of any natural born citizen that the government has done this for? I don’t. Why does our government show more compassion for foreign people over our own people that help here? This is not fair to our citizens. No wonder all the foreigners want to come, the government treat them with dignity and disregard our own people. We are the citizens that elected the officials into office but we are forgotten about once they get into office. Their priorities change once they obtain office.

Why are all of our businesses moving overseas putting thousands of people out of work? Because the government is not willing to give them any incentives to stay in the United States They can get cheaper labor abroad plus they get more incentives from the other governments because it helps make their countries stronger. I’ll admit that the unions had a lot to play in the moving of most industries because of the people wanted more pay than the industry could afford and still make a profit. At the beginning the industrial revolution the unions were needed to see to it that the employees were treated fairly, but over time the unions did more harm than good by asking for more than the industry could tolerate. The industry has to make a profit to continue to thrive, but when the profits are cut to a certain extent to please the employees the business could no longer tolerate and were forced to relocate to where they achieve the profit margin needed to continue to operate. Our own factories moved overseas but the overseas factories started relocating here and offering jobs with good and benefits but refused to be unionized. This idea has worked out fine because the company is pleased with making their profit while the employees are pleased with their work conditions. People in this country have a tendency to get greedy and because of this greed they lose out big time in the long run. They don’t recognize a good thing when they have it and wind up in the unemployment line. The government needs to oversee the actions forcing companies to relocate overseas and try to step in help find a cure to the situation. The government needs to reach out and help our own people.

Almost a decade ago, the federal government dropped $100 million for an Earth-monitoring satellite that never made it into space. Today it sits in a closet in Maryland. Cost to taxpayers for storing it: $1 million a year. And that's just what's hiding in one closet. Who knows what's in the rest of them? Reader's Digest decided to find out.
Your Tax Dollars Wasted
Photographed by Nicolas Eveleigh; Imaging by Joe Zeff Design, Inc.
The U.S. spends more than $400 per person on health care administrative costs and insurance -- six times more than other industrialized nations.

Because we think the government should be held to at least the same standards as a publicly traded company, and because as taxpayers, we're America's shareholders, we performed an audit of sorts of the federal books. We're not economists, but we do have common sense. We tried to be apolitical and got help from Congressional staffers from both parties, as well as various watchdog groups and agencies (see list*). In the end, we found that the federal government wastes nearly $1 trillion every year.

That's roughly equal to the amount collected annually by the Internal Revenue Service in personal income taxes. Put another way, it's also equal to about one-third of the country's $2.9 trillion total annual budget. And reclaiming that lost trillion could help wipe out the country's annual budget deficit, improve education, and provide health insurance for those who don't have it.

So how do you define "waste"? David Walker of the Government Accountability Office (GAO), a federal watchdog agency, calls it "the government's failure to give taxpayers the most for their money." For our part, we used the kind of household test you would use on a piece of meat sitting in your refrigerator: If it smells rotten, it's waste. And there is plenty to sniff out. Our government regularly pays for products and services it never gets, wildly overpays companies to do things it could do more cheaply itself, loses money outright due to lax accounting and oversight, fails to collect what it's owed, and antes up for unnecessary programs.

How exactly does the federal government fritter away your hard-earned tax dollars? We've identified what we consider ten of the worst ways. Now, we're not naive. We know that not everyone will agree on every ripoff we've flagged. And we know that even with excellent discipline and management, it's unlikely we could recover more than half of this waste. But hey, it's a start.

1. Taxes: Cheating Shows. The Internal Revenue Service estimates that the annual net tax gap—the difference between what's owed and what's collected—is $290 billion, more than double the average yearly sum spent on the wars in Iraq and Afghanistan.

About $59 billion of that figure results from the underreporting and underpayment of employment taxes. Our broken system of immigration is another concern, with nearly eight million undocumented workers having a less-than-stellar relationship with the IRS. Getting more of them on the books could certainly help narrow that tax gap.

Going after the deadbeats would seem like an obvious move. Unfortunately, the IRS doesn't have the resources to adequately pursue big offenders and their high-powered tax attorneys. "The IRS is outgunned," says Walker, "especially when dealing with multinational corporations with offshore headquarters."

Another group that costs taxpayers billions: hedge fund and private equity managers. Many of these moguls make vast "incomes" yet pay taxes on a portion of those earnings at the paltry 15 percent capital gains rate, instead of the higher income tax rate. By some estimates, this loophole costs taxpayers more than $2.5 billion a year.

Oil companies are getting a nice deal too. The country hands them more than $2 billion a year in tax breaks. Says Walker, "Some of the sweetheart deals that were negotiated for drilling rights on public lands don't pass the straight-face test, especially given current crude oil prices." And Big Oil isn't alone. Citizens for Tax Justice estimates that corporations reap more than $123 billion a year in special tax breaks. Cut this in half and we could save about $60 billion.

The Tab*
Tax Shortfall: $290 billion (uncollected taxes) + $2.5 billion (undertaxed high rollers) + $60 billion (unwarranted tax breaks)
Starting Tab: $352.5 billion

2. Healthy Fixes. Medicare and Medicaid, which cover elderly and low-income patients respectively, eat up a growing portion of the federal budget. Investigations by Sen. Tom Coburn (R-OK) point to as much as $60 billion a year in fraud, waste and overpayments between the two programs. And Coburn is likely underestimating the problem.

The U.S. spends more than $400 per person on health care administration costs and insurance -- six times more than other industrialized nations.

That's because a 2003 Dartmouth Medical School study found that up to 30 percent of the $2 trillion spent in this country on medical care each year—including what's spent on Medicare and Medicaid—is wasted. And with the combined tab for those programs rising to some $665 billion this year, cutting costs by a conservative 15 percent could save taxpayers about $100 billion. Yet, rather than moving to trim fat, the government continues such questionable practices as paying private insurance companies that offer Medicare Advantage plans an average of 12 percent more per patient than traditional Medicare fee-for-service. Congress is trying to close this loophole, and doing so could save $15 billion per year, on average, according to the Congressional Budget Office.

Another money-wasting bright idea was to create a giant class of middlemen: Private bureaucrats who administer the Medicare drug program are monitored by federal bureaucrats—and the public pays for both. An October report by the House Committee on Oversight and Government Reform estimated that this setup costs the government $10 billion per year in unnecessary administrative expenses and higher drug prices.

The Tab*
Wasteful Health Spending:
$60 billion (fraud, waste, overpayments) + $100 billion (modest 15 percent cost reduction) + $15 billion (closing the 12 percent loophole) + $10 billion (unnecessary Medicare administrative and drug costs)
Total $185 billion
Running Tab: $352.5 billion +$185 billion = $537.5 billion

*All figures are estimates.

*Source list: OMB Watch, Tax Payers for Common Sense, Citizens Against Government Waste, Cato Institute, Heritage Foundation, Government Accountability Office

Running Up Tabs
3. Military Mad Money. You'd think it would be hard to simply lose massive amounts of money, but given the lack of transparency and accountability, it's no wonder that eight of the Department of Defense's functions, including weapons procurement, have been deemed high risk by the GAO. That means there's a high probability that money -- "tens of billions," according to Walker -- will go missing or be otherwise wasted.

The DOD routinely hands out no-bid and cost-plus contracts, under which contractors get reimbursed for their costs plus a certain percentage of the contract figure. Such deals don't help hold down spending in the annual military budget of about $500 billion. That sum is roughly equal to the combined defense spending of the rest of the world's countries. It's also comparable, adjusted for inflation, with our largest Cold War-era defense budget. Maybe that's why billions of dollars are still being spent on high-cost weapons designed to counter Cold War-era threats, even though today's enemy is armed with cell phones and IEDs. (And that $500 billion doesn't include the billions to be spent this year in Iraq and Afghanistan. Those funds demand scrutiny, too, according to Sen. Amy Klobuchar, D-MN, who says, "One in six federal tax dollars sent to rebuild Iraq has been wasted.")

Meanwhile, the Pentagon admits it simply can't account for more than $1 trillion. Little wonder, since the DOD hasn't been fully audited in years. Hoping to change that, Brian Riedl of the Heritage Foundation is pushing Congress to add audit provisions to the next defense budget.

If wasteful spending equaling 10 percent of all spending were rooted out, that would free up some $50 billion. And if Congress cut spending on unnecessary weapons and cracked down harder on fraud, we could save tens of billions more.

The Tab*
Wasteful military spending: $100 billion (waste, fraud, unnecessary weapons)
Running Tab: $537.5 billion + $100 billion = $637.5 billion

4. Bad Seeds. The controversial U.S. farm subsidy program, part of which pays farmers not to grow crops, has become a giant welfare program for the rich, one that cost taxpayers nearly $20 billion last year.

Two of the best-known offenders: Kenneth Lay, the now-deceased Enron CEO, who got $23,326 for conservation land in Missouri from 1995 to 2005, and mogul Ted Turner, who got $590,823 for farms in four states during the same period. A Cato Institute study found that in 2005, two-thirds of the subsidies went to the richest 10 percent of recipients, many of whom live in New York City. Not only do these "farmers" get money straight from the government, they also often get local tax breaks, since their property is zoned as agricultural land. The subsidies raise prices for consumers, hurt third world farmers who can't compete, and are attacked in international courts as unfair trade.

The Tab*
Wasteful farm subsidies: $20 billion
Running Tab: $637.5 billion + $20 billion = $657.5 billion

*All figures are estimates.

d on unusable housing. The list goes on.

The Tab*
Wasteful Capital Spending: $30 billion
Running Tab: $657.5 billion + $30 billion = $687.5 billion

6. Fraud and Stupidity. Sen. Chuck Grassley (R-IA) wants the Social Security Administration to better monitor the veracity of people drawing disability payments from its $100 billion pot. By one estimate, roughly $1 billion is wasted each year in overpayments to people who work and earn more than the program's rules allow.

The federal Food Stamp Program gets ripped off too. Studies have shown that almost 5 percent, or more than $1 billion, of the payments made to people in the $30 billion program are in excess of what they should receive.

One person received $105,000 in excess disability payments over seven years.

There are plenty of other examples. Senator Coburn estimates that the feds own unused properties worth $18 billion and pay out billions more annually to maintain them. Guess it's simpler for bureaucrats to keep paying for the property than to go to the trouble of selling it.

The Tab*
General Fraud and Stupidity: $2 billion (disability and food stamp overpayment)
Running Tab: $687.5 billion + $2 billion = $689.5 billion

7. Pork Sausage. Congress doled out $29 billion in so-called earmarks—aka funds for legislators' pet projects—in 2006, according to Citizens Against Government Waste. That's three times the amount spent in 1999. Congress loves to deride this kind of spending, but lawmakers won't hesitate to turn around and drop $500,000 on a ballpark in Billings, Montana.

The most infamous earmark is surely the "bridge to nowhere"—a span that would have connected Ketchikan, Alaska, to nearby Gravina Island—at a cost of more than $220 million. After Hurricane Katrina struck New Orleans, Senator Coburn tried to redirect that money to repair the city's Twin Span Bridge. He failed when lawmakers on both sides of the aisle got behind the Alaska pork. (That money is now going to other projects in Alaska.) Meanwhile, this kind of spending continues at a time when our country's crumbling infrastructure—the bursting dams, exploding water pipes and collapsing bridges—could really use some investment. Cutting two-thirds of the $29 billion would be a good start.

The Tab*
Pork Barrel Spending: $20 billion
Running Tab: $689.5 billion + $20 billion = $709.5 billion

What You Can Do
8. Welfare Kings. Corporate welfare is an easy thing for politicians to bark at, but it seems it's hard to bite the hand that feeds you. How else to explain why corporate welfare is on the rise? A Cato Institute report found that in 2006, corporations received $92 billion (including some in the form of those farm subsidies) to do what they do anyway—research, market and develop products. The recipients included plenty of names from the Fortune 500, among them IBM, GE, Xerox, Dow Chemical, Ford Motor Company, DuPont and Johnson & Johnson.

The Tab*
Corporate Welfare: $50 billion
Running Tab: $709.5 billion + $50 billion = $759.5 billion

9. Been There, Done That. The Rural Electrification Administration, created during the New Deal, was an example of government at its finest—stepping in to do something the private sector couldn't. Today, renamed the Rural Utilities Service, it's an example of a government that doesn't know how to end a program. "We established an entity to electrify rural America. Mission accomplished. But the entity's still there," says Walker. "We ought to celebrate success and get out of the business."

In a 2007 analysis, the Heritage Foundation found that hundreds of programs overlap to accomplish just a few goals. Ending programs that have met their goals and eliminating redundant programs could comfortably save taxpayers $30 billion a year.

The Tab*
Obsolete, Redundant Programs: $30 billion
Running Tab: $759.5 billion + $30 billion = $789.5 billion

10. Living on Credit. Here's the capper: Years of wasteful spending have put us in such a deep hole, we must squander even more to pay the interest on that debt. In 2007, the federal government carried a debt of $9 trillion and blew $252 billion in interest. Yes, we understand the federal government needs to carry a small debt for the Federal Reserve Bank to operate. But "small" isn't how we would describe three times the nation's annual budget. We need to stop paying so much in interest (and we think cutting $194 billion is a good target). Instead we're digging ourselves deeper: Congress had to raise the federal debt limit last September from $8.965 trillion to almost $10 trillion or the country would have been at legal risk of default. If that's not a wake-up call to get spending under control, we don't know what is.

The Tab*
Interest on National Debt: $194 billion
Final Tab: $789.5 billion + $194 billion = $983.5 billion

What YOU Can Do
Many believe our system is inherently broken. We think it can be fixed. As citizens and voters, we have to set a new agenda before the Presidential election. There are three things we need in order to prevent wasteful spending, according to the GAO's David Walker:

 Incentives for people to do the right thing.

 Transparency so we can tell if they've done the right thing.

 Accountability if they do the wrong thing.

Two out of three won't solve our problems.

So how do we make it happen? Demand it of our elected officials. If they fail to listen, then we turn them out of office. With its approval rating hovering around 11 percent in some polls, Congress might just start paying attention.

Start by writing to your Representatives. Talk to your family, friends and neighbors, and share this article. It's in everybody's interest.

*All figures are estimates.

Find and contact your Congressional representative.
From Reader's Digest - January 2008

A real war on government waste could easily save over $100 billion annually without harming the legitimate operations and benefits of government programs. As a first step, lawmakers should address the 10 following examples of egregious waste.

1. The Missing $25 Billion

Buried in the Department of the Treasury’s 2003 Financial Report of the United States Government is a short section titled “Unreconciled Transactions Affecting the Change in Net Position,” which explains that these unreconciled transactions totaled $24.5 billion in 2003.[2]

The unreconciled transactions are funds for which auditors cannot account: The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately, the Treasury report con cludes that locating the money is “a priority.”

The unreconciled $25 billion could have funded the entire Department of Justice for an entire year.

2. Unused Flight Tickets Totaling $100 Million

A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused.[3]

Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. The department would purchase the ticket directly and then inex plicably reimburse the employee for the cost of the ticket. (In one case, an employee who allegedly made seven false claims for airline tickets professed not to have noticed that $9,700 was deposited into his/her account). These additional transactions cost taxpayers $8 million.

This $108 million could have purchased seven Blackhawk helicopters, 17 M1 Abrams tanks, or a large supply of additional body armor for U.S. troops in Afghanistan and Iraq.

3. Embezzled Funds at the Department of Agriculture

Federal employee credit card programs were designed to save money. Rather than weaving through a lengthy procurement process to acquire basic supplies, federal employees could purchase job-related products with credit cards that would be paid by their agency. What began as a smart way to streamline government has since been corrupted by some federal employees who have abused the public trust.

A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

The USDA has pledged a thorough investigation, but it will have a huge task: 55,000 USDA credit cards are in circulation, including 1,549 that are still held by people who no longer work at the USDA.[4]

4. Credit Card Abuse at the Department of Defense

The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.[5]

5. Medicare Overspending

Medicare wastes more money than any other federal program, yet its strong public support leaves lawmakers hesitant to address program effi ciencies, which cost taxpayers and Medicare recip ients billions of dollars annually.

For example, Medicare pays as much as eight times what other federal agencies pay for the same drugs and medical supplies.[6] The Department of Health and Human Services (HHS) recently com pared the prices paid by Medicare and the Depart ment of Veterans Affairs (VA) health care program for 16 types of medical equipment and supplies, which account for one-quarter of Medicare’s equip ment and supplies purchases. The evidence showed that Medicare paid an average of more than double what the VA paid for the same items. The largest difference was for saline solution, with Medicare paying $8.26 per liter compared to the $1.02 paid by the VA.[7] (See Table 1.)

These higher prices not only cost the program more money, but also take more money out of the pockets of Medicare beneficiaries. In 2002, senior citizens’ co-payments accounted for 20 percent of the $9.4 billion in allowed claims for medical equipment and supplies.[8] Higher prices mean higher co-payments.

Medicare also overpays for drugs. In 2000, Medicare’s payments for 24 leading drugs were $1.9 billion higher than they would have been under the prices paid by the VA or other federal agencies. Although Medicare is supposed to pay wholesale prices for drugs, it relies on drug manu facturers to define the prices, and manufacturers have strong incentives to inflate their prices.[9]

Nor are inflated prices for drugs and supplies the most expensive examples of Medicare’s inefficien cies. Basic payment errors—the results of deliber ate fraud and administrative errors—cost $12.3 billion annually. As much as $7 billion owed to the program has gone uncollected or has been written off.[10] Finally, while Medicare contracts claims pro cessing and administration to several private com panies, 19 cases of contractor fraud have been settled in recent years, with a maximum settlement of $76 million.[11]

Putting it all together, Medicare reform could save taxpayers and program beneficiaries $20 bil lion to $30 billion annually without reducing ben efits. That would be enough to fund a $3,000 refundable health care tax credit for nearly 10 mil lion uninsured low-income households.

6. Funding Fictitious Colleges and Students

In 2002, the Department of Education received an application to certify the student loan participa tion of the Y’Hica Institute in London, England. After approving the certification, the department received and approved student loan applications from three Y’Hica students and disbursed $55,000.

The Education Department administrators over looked one problem: Neither the Y’Hica Institute nor the three students who received the $55,000 existed. The fictitious college and students were created (on paper) by congressional investigators to test the Department of Education’s verification pro cedures. All of the documents were faked, right down to naming one of the fictional loan student applicants “Susan M. Collins,” after the Senator requesting the investigation.[12]

Such carelessness helps to explain why federal student loan programs routinely receive poor man agement reviews from government auditors. At last count, $21.8 billion worth of student loans are in default, and too many cases of fraud are left undetec ted.[13] Tracking students across federal programs, verifying loan application data with IRS income data, and implementing controls to prevent the dis bursement of loans to fraudulent applicants could save taxpayers billions of dollars.

7. Manipulating Data to Encourage Spending

The Army Corps of Engineers spends $5 billion annually constructing dams and other water projects. Yet, in a massive conflict of interest, it is also charged with evaluating the science and eco nomics of each proposed water project. The Corps’ “strategic vision” calls on managers to increase their budgets as rapidly as possible, which requires approving as many proposed projects as possible.[14] Consequently, the Corps has repeatedly been accused of deliberately manipulating its economic studies to justify unworthy projects.

Investigations by the GAO, The Washington Post, and several private organizations have found that Corps studies routinely contain dozens of basic arithmetic errors, computer errors, and ridiculous economic assumptions that artificially inflate the benefits of water projects by as much as 300 per cent.[15] In one case, a study’s authors inflated a project’s benefits by using a 2.5 percent interest rate that dated back to 1954. In many cases in which the Corps calculated that a project would be a net benefit, arithmetic corrections revealed that the costs would be many times greater than the bene fits.[16] By that point, of course, the unnecessary and wasteful project is often underway and cannot be stopped.

These errors appear to reflect more deception than sloppiness. A Washington Post investigation uncovered managers ordering analysts to “get cre ative,” to “look for ways to get to yes as fast as pos sible,” and “not to take no for an answer.” After a public outcry, in 2002, the Corps suspended work on 150 projects to review the economics used to justify them.[17] However, given the combination of Congress’s thirst for pork-barrel projects and the Corps’ built-in incentives to approve projects that will increase its budget, real reforms seem unlikely.

8. State Abuse of Medicaid Funding Formulas

Significant waste, fraud, and abuse pervade Medicaid, which provides health services to 44 million low-income Americans. While states run their own Medicaid programs, the federal govern ment reimburses an average of 57 percent of each state’s costs.

This system gives states an incentive to overre port their Medicaid expenditures in order to receive larger federal reimbursements. Not sur prisingly, the GAO has identified state schemes that shift money between state accounts to create an illusion of higher Medicaid expenditures. Simi larly, some states have spent their federal Medicaid dollars on non-Medicaid purposes. Tight state budgets like those experienced by most states today have increased the pressure to use such deceptive tactics.

The GAO and the HHS Inspector General have also uncovered some states’ practice of recovering improper payments, retaining the funds, and then spending them on unrelated programs—a practice that costs the federal government well over $2 bil lion per year. Congress could enact legislation to prohibit these actions more effectively.

Minor reforms enacted by HHS in 2001 and 2002 are expected to save Medicaid $70 billion over the next decade. A small sample of financing schemes uncovered in a few states suggests that, if Congress acts, even larger savings are available.[18]

9. Earned Income Tax Credit Overpayments

The earned income tax credit (EITC) provides $31 billion in refundable tax credits to 19 million low-income families. The IRS estimates that $8.5 billion to $9.9 billion of this amount—nearly one-third—is wasted in overpayments.

The complexity of the EITC law leads to many of these mistakes. Calculating the credits is more complex than calculating regular income taxes. While the credit amount depends on the number of children in a household, the tax code does not clearly define how a child qualifies for the credit. In addition, fraud and underreporting of income are common, and the IRS lacks the resources to verify the qualifications of all EITC claimants.

Efforts are being made to address this prob lem, but Congress can do more by requiring bet ter verification of incomes and by clearly defining the standards by which a child qualifies for the EITC.[19]

10. Redundancy Piled on Redundancy

Government’s layering of new programs on top of old ones inherently creates duplication. Having sev eral agencies perform similar duties is wasteful and confuses program beneficiaries who must navigate each program’s distinct rules and requirements.

Some overlap is inevitable because some agen cies are defined by whom they serve (e.g., veterans, Native Americans, urbanites, and rural families), while others are defined by what they provide (e.g., housing, education, health care, and economic development). When these agencies’ constituencies overlap, each relevant agency will often have its own program. With 342 separate economic devel opment programs, the federal government needs to make consolidation a priority.

Consolidating duplicative programs will save money and improve government service. In addi tion to those programs that should be eliminated completely, Congress should consolidate the fol lowing sets of programs:

    *
      342 economic development programs;
    *
      130 programs serving the disabled;
    *
      130 programs serving at-risk youth;
    *
      90 early childhood development programs;
    *
      75 programs funding international education, cultural, and training exchange activities;
    *
      72 federal programs dedicated to assuring safe water;
    *
      50 homeless assistance programs;
    *
      45 federal agencies conducting federal crimi nal investigations;
    *
      40 separate employment and training pro grams;
    *
      28 rural development programs;
    *
      27 teen pregnancy programs;
    *
      26 small, extraneous K–12 school grant pro grams;
    *
      23 agencies providing aid to the former Soviet republics;
    *
      19 programs fighting substance abuse;
    *
      17 rural water and waste-water programs in eight agencies;
    *
      17 trade agencies monitoring 400 interna tional trade agreements;
    *
      12 food safety agencies;
    *
      11 principal statistics agencies; and
    *
      Four overlapping land management agencies.[20]

Most Outrageous Government Waste
By Thomas A. Schatz  June 1996
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Filed Under: Featured

Mr. Schatz is president of Citizens Against Government Waste.

Since my job is to be a watchdog on government waste, I’m often asked about the most outrageous cases.

That’s a tough call because government bureaucrats never take care of your money as carefully as you would take care of it yourself. More important, bureaucrats spend money on what government wants, not what you want—which is the whole point of taxing away your money.

Without authorization, for instance, the feds spent $19.6 million annually on the International Fund for Ireland. Sounds like a noble cause, but the money went for projects like pony-trekking centers and golf videos.

Congressional budget-cutters spared the $440,000 spent annually to have attendants push buttons on the fully automated Capitol Hill elevators used by Representatives and Senators.

Last year, the National Endowment for the Humanities spent $4.2 million to conduct a nebulous “National Conversation on Pluralism and Identity.” Obviously, talk radio wasn’t considered good enough.

The Pentagon and Central Intelligence Agency channeled some $11 million to psychics who might provide special insights about various foreign threats. This was the disappointing “Stargate” program.

The Department of Education spent $34 million supposedly helping Americans become better shoppers and homemakers. Wasn’t it about time?

The federal government proposed spending $14 million for a new Army Museum, although there already were 47 Army Museums around the country. We helped stop that idea.

Dubious government spending schemes abound since bureaucrats play with other people’s money. For example, the National Institutes of Mental Health (NIMH) spent $70,029 to see if the degu, a diurnal South American rodent, can help us better understand jet lag . . . they spent $77,826 to study “Coping with Change in Czechoslovakia” . . . $100,271 to see if volunteering is good for older people . . . $124,910 to reduce “School Phobia” in children . . . $161,913 to study “Israeli reactions to SCUD Attacks during the Gulf War” . . . and $187,042 to study the quality of life in Hawaii.

Over the years, political wrangling twists the most noble-sounding government programs beyond recognition. For example, the Social Security Administration’s $25 billion a year Supplemental Security Income (SSI) program. Almost 250,000 children qualify for SSI checks because they can’t participate in “age appropriate activities.” Worse, thousands of prisoners get SSI checks relating to their alleged disabilities—costing taxpayers about $20 million a year.

That’s not all. In Denver, the government reportedly sent $160,000 to recipients at their “official address”—a tavern. A San Francisco addict used his SSI check to buy drugs, which he subsequently sold on the street for a profit. A Van Nuys, California, alcoholic received a $26,000 SSI check, then spent the money on a van and two cars which he subsequently wrecked while driving drunk. Los Angeles SSI recipients reportedly faked mental illness and had a doctor concoct false medical records, so they could pocket $45,000 worth of checks. An estimated 79,000 alcoholics and drug addicts are believed to spend SSI checks—some $360 million annually—on their habits.

Again and again, programs aimed at the poor are captured by well-heeled interest groups. For example, the Commerce Department’s U.S. Travel and Tourism Administration (USTTA) gave away $440,000 in so-called “disaster relief” to Western ski resort operators when there wasn’t much snow.

The Economic Development Administration spent “anti-poverty” funds to help build a $1.2 million football stadium in spiffy Spartanburg, South Carolina. During the summer, it will serve as a practice facility for the National Football League Carolina Panthers, and the rest of the year it will be used by Wofford College, which has a $50 million endowment.

Look at one of the most enduring legacies of Lyndon Johnson’s “War on Poverty”: the Appalachian Regional Commission. It was billed as help for an impoverished region. During the past three decades, this bureaucracy you’ve probably never heard of has spent $6.2 billion, yet the region remains impoverished.

Where did the money go? Two-thirds was spent building 26 highways connecting well-to-do urban centers. The money went to construction workers whose wages are definitely above-average. Despite revolutionary talk in Washington, the Appalachian Regional Commission goes on and on.

Or take the plight of the family farmer. I know you’ve been regaled about wasteful spending on agricultural subsidies, so I’ll just cite a single intriguing example: 1.6 million farm subsidy checks for $1.3 billion, mailed to urban zip codes during the past decade. New York City “farmers” pocketed $7 million during the past decade, Washington, D.C., “farmers” $10 million, Los Angeles “farmers” $10.7 million, Minneapolis “farmers” $48 million, Miami “farmers” $54.5 million, and Phoenix “farmers” $71.5 million. Among those on the take, to the tune of $1.3 million: 47 “farmers” in Beverly Hills, California—one of America’s wealthiest cities.

A lot of government spending is justified as necessary for national security. For instance, maritime subsidies supposedly help maintain a fleet for an emergency. Laws require government agencies to use U.S.-flag vessels which are U.S.-built, U.S.-owned, and U.S.-crewed, costing two to four times the world market price of comparable vessels available elsewhere. When the U.S. Department of Agriculture and Agency for International Development give away surplus grain, they must use U.S.-flag vessels for at least 75 percent of shipments, adding $233 million to the taxpayer burden. The U.S.-flag requirement adds $1.75 billion to the defense budget. Subsidy per maritime job: over $100,000.

The defense budget is larded with waste not because it’s run by bad guys but because it’s big, and bureaucrats are, as always, spending other people’s money. The Pentagon has an “operational support airlift” consisting of some 500 airplanes and 100 helicopters for flying military brass and civilian bureaucrats on 1,800 trips a month—costing taxpayers $380 million a year. Many of the destinations are served by commercial airlines.

Last year, the Pentagon announced it would spend $5.1 million to build a new 18-hole golf course at Andrews Air Force Base in suburban Maryland, which already has two. Golf Digest reported there are 19 military golf courses around Washington, D.C. Why a new golf course? One Pentagon official was quoted as saying “a lot of golf gets played out there. On Saturday mornings, people are standing on top of each other.”

Can It Continue?

How can such outrageous waste go on year after year? Simple: bureaucrats aren’t doling out their money, so they have little incentive to be responsible. Politically connected special interests, who are usually better off than the average taxpayer, seem to get most of the loot.

The most powerful special interest is government itself. In fiscal year 1993, the federal government owned 569,556 vehicles—one for every six full-time employees. Included were 117 limousines. The government’s fleet expanded more than 130,000 vehicles since the Grace Commission called for it to be cut in half more than a decade ago.

Government officials multiply the number of regulations regardless of the waste they cause. For example, the Defense Department has 1,357 pages of regulations about how officials travel. Complying with these regulations adds about 30 percent to travel costs. If the Pentagon adopted the best practices of private companies, it could save an estimated $650 million to $840 million every year. Of course, government regulations cause enormous waste in the private sector—tax compliance costs alone run into the billions—but that’s a vast subject unto itself.

The federal government wastes money through grants to the most politically powerful environmental lobbyists. For example, between 1990 and 1994, the Natural Resources Defense Council got $246,622; Defenders of Wildlife, $1,285,658; Environmental Defense Fund, $1,493,976; and the World Wildlife Fund, $26,584,335. All together, environmental lobbyists collected $156,644,352 during this period. Every one pushes the federal government to enact more regulations.

Whenever you hear a politician propose that government take over some private business, like New York’s troubled Long Island Lighting Company, there should be red flags all over the place, because government operation means high costs. At the U.S. Government Printing Office, for instance, costs are estimated to be 50 percent higher than in the private printing industry. If the U.S. air traffic control system were transferred to private companies and the services paid by user fees, taxpayer savings would probably be around $18 billion over the next five years.

With a $1.5 trillion annual budget, the feds take so much of your money that they can’t possibly keep track of it even if they wanted to. For example, a contractor sold $27 electronic relays to the government’s Strategic Petroleum Reserve for between $484 and $521 apiece. The Department of Energy paid some of its employees $5,000 a year to lose weight—the outlays totaled $10 million a year. The owner of a California apartment building got Department of Housing and Urban Development subsidies, then illicitly diverted $610,000 into his own accounts. One “farmer” collected $1.6 million in government insurance payments for non-existent crops. Forty-three people in New York City pocketed over $40 million in phony food stamp claims. Five Floridians stole $20 million from Medicare—part of the estimated $17 billion of annual Medicare fraud.

What to do about such waste? The government is crawling with auditors, and there have been a zillion investigations, yet waste goes on. Citizens Against Government Waste will continue to be a watchdog. The only long-term solution, though, is to somehow cut big government down to size. Only when it’s much smaller will you be able to keep more of your hard-earned money, which, after all, is yours.