Ten percent of the US budget goes to theft/fraud
Treasury Secretary Scott Bessent has an estimate for us:
Somewhere between 5-10% of the total federal budget gets gobbled up by wrongdoers each year, Bessent said, citing data from the Government Accountability Office (GAO).
“If we can narrow that number, President Trump asked for a $500 billion increase in the defense budget to fortify the 10 to 20 years of neglect,” Bessent told journalist Christopher Rufo in a recent interview.
“If we need to flex up our military budget, if we can get rid of this waste, fraud, and abuse, we can finance a safer, sounder US with that, without taking on more debt. Sounds like a pretty good outcome to me.”
It is infuriating to think that much money has gone to criminals. And yet it’s believable. The amount almost certainly mushroomed during COVID, when many of the controls (including those on voting security, by the way) were relaxed. I don’t think this relaxation policy was done in all innocence, either. Was it done in part to facilitate fraud, graft, grift? I would bet on the answer being “yes.”
Plus:
Beyond fraudulent government spending, the Internal Revenue Service estimates that it has failed to collect hundreds of billions of dollars worth of taxes owed.
The IRS most recently projected that the so-called “tax gap” was about $606 billion as of fiscal year 2022.
Pretty soon we’ll be talking about real money.
[NOTE: That last sentence is a riff on this quote from Senator Everett Dirksen:
A billion here, a billion there, and pretty soon you’re talking about real money.
Indeed.
I keep voting R in the possibly vain hope that something will be done to reduce the size of the federal government. Trump is the only president in recent memory who has tried to do that. Federal social welfare programs, while they sound compassionate, in practice always turn out to be invitations to fraud and corruption.
While voting R isn’t always effective, it’s certain that elected Dems will always vote for more spending and more corruption.
It’s easy to see that Federal spending is hugely bloated. Adjust CY 2000 spending for population growth and CPI, and you find it to be about $4 trillion. Actual 2025 was more like $7 trillion. That $3 trillion is only a ballpark estimate for the amount of bloat, of course, but the real number can’t be very different from that because it’s not as though CY 2000 represented anything like small government to begin with.
Fundamentally the issue is Congress, neither party has any appetite for curbing spending in any meaningful way and the abandonment of the formal budget process has ensured that they never will.
@Kate:While voting R isn’t always effective, it’s certain that elected Dems will always vote for more spending and more corruption.
I’m afraid it’s rather more serious than “isn’t always effective”. Just Thursday 17 House Republicans helped the Dems pass a bill to restore Obamacare subsidies. There’s too many Republicans happy to help the Dems get theirs, provided Republican cronies are looked after. The Senate Republicans who voted against it so publicly before that will very likely work out a back-room deal to meet the House at least part way: voting against it before voting for it fools just enough people.
I trust most commenters here remember what was done to DOGE. It was only a year ago.
Was it done in part to facilitate fraud, graft, grift? I would bet on the answer being “yes.”
That’s what bothers me. And what type of graft or grift? The type that supports machine politics for the Dems, perhaps?
For a long time there had been videos of waves and convoys of illegal immigrants trekking through Mexico on the way to our southern border. Looking a little more closely at those videos, one can see that 90 to 99% of them are wearing brand new shoes, clothes, and backpacks.
I used to assume that someone like George Soros was paying for that apparel. But now it looks like it’s our tax dollars funneled into grifting NGOs who then turn around and use it to facilitate illegal immigration.
There are probably many other schemes. I’m always skeptical of an NGO who claims to have an arm that does “Get out the vote” operations. R-i-g-h-t. Who’s vote are they getting out, and are they getting out fraudulent votes?
I think the Founders made a mistake in not granting Line Item Veto power to the President.
Back of envelope calculation for FY 2025 if 10% “wrongdoers” money were eliminated.
Total federal spending: ~$7.0 trillion
Total federal revenues: ~$5.2 trillion
Deficit: $7.0 T – $5.2 T = $1.8 T
Wrongdoers: $7.0 T * 10% = $700 B
New spending: $7.7 T – $700 B = $6.3 T
New deficit: $6.3 T – $5.2 T = $1.1 T
New deficit / Defict: $1.1 T / 1.8 T = ~61%
Therefore the deficit would fall ~39%, though not to zero.
Not bad. I can dream.
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https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/
https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/
@huxley:Therefore the deficit would fall ~39%, though not to zero.
I’m responding to you, but what follows isn’t aimed at you, if you take my meaning…
The deficit would fall until the next year’s continuing resolution. Fundamentally it’s a spending problem, not a fraud problem. Now fraud is a moral issue and should be gone after harder, but the math doesn’t care why the finances are unsustainable and even waving a magic wand and disappearing all the fraud would not fix the unsustainable trajectory.
If we had 20% fraud, year after year, on a budget that grew no faster than CPI and population, Federal finances would be still be sustainable even if nothing were done about the fraud. The path we’re on will destroy us even if all fraud is eliminated.
By all means let us fix the fraud, but that is comparatively the easy part. The hard part is building a culture that is not dependent on Federal money. And that most especially includes business culture–for example, it’s insurance companies that get the ACA subsidy money (and if anyone was puzzled by the Republican support for bringing the subsidies back, now you know.)
I called it a back of the envelope calculation. I was trying to get a feel for the numbers, not propose a comprehensive solution.
Obviously we are not going to eliminate the 10% or whatever in one whack either.
@huxley: called it a back of the envelope calculation
Yeah, I wasn’t arguing with you, and edited my comment to try to make that more clear. I’ve done some similar ones and got much the same answers. Fraud and all the other crap is about $3 T. Fraud alone might be, as you say, $0.7 T.
On top of the fraud there is the money laundering of all kinds of other spending back to DC and probably at every level of government. We are going through a “what happened to the money?” at the county level at the moment.
— Kate
The deficit spending is a symptom. So, in a sense, is government bloat. The voters are fully prepared to cut Someone Else’s spending, and raise Someone Else’s taxes. That’s human nature. The factions are sufficiently balanced, though, that nobody can do much about it. When the electoral deadlock finally, decisively breaks, then it’ll be possible to do something about the rest, because the winners will then be free to raise Someone Else’s taxes and cut Someone Else’s spending and programs.
10 %
Give me a break.
More likely it’s 25% to 35%
More likely it’s 25% to 35%
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Unless you fancy the entire military budget consists of graft or that all Social Security recipients are phantoms, no.