According to the federal government’s latest estimates, government programs for fiscal year 2015 paid out $137 billion “improperly”—meaning that these payments violated guidelines or rules in some way. Fraud is not the only reason, as the federal government reports. Rather, an improper payment can also result from simple clerical error or failure to confirm that a recipient was eligible to receive the amount of money that was disbursed. Whether due to fraud, the complexity of program rules, or bureaucracy, $137 billion is a significant amount of taxpayer funds. Federal spending has grown too massive for the government to provide adequate oversight.
The White House has been among those who believe in the productivity-pay gap claim that workers’ productivity rose at a high rate over the last four decades but growth in real earnings failed to keep pace and instead changed at a nearly flat rate (see the green line in the chart below). These arguments continue to fuel the debate on contested labor policies such as the overtime pay rule and minimum wage increases. A more careful and comprehensive analysis of real worker pay and productivity data, however, shows that worker compensation is closely tied to worker productivity.
A recent article from Politico looked at the growth in unauthorized appropriations as a share of total discretionary spending. Each year the Congressional Budget Office (CBO) releases a report listing programs that have maintained funding despite their authorization expiring. The latest CBO report finds that “lawmakers appropriated about $310 billion for fiscal year 2016 for programs and activities whose authorizations of appropriations have expired.” That’s equal to about 26 percent of total appropriations.
The latest federal budget projections from the Congressional Budget Office (CBO) should set off alarm bells on Capitol Hill. According to CBO’s baseline, federal debt held by the public will climb from $14 trillion this year to almost $24 trillion in fiscal year 2026. Measured as a share of the economy, publicly held debt as a percentage of GDP is projected to jump substantially, from 75.6 percent to 86.1 percent in the next 11 years. As the following chart shows, current debt levels are already disconcertingly high.
The recent record $1.6 billion Powerball lottery jackpot captured the nation’s attention. The sum is so immense, it’s hard for most of us to wrap our minds around. Another immense sum that’s hard for Americans to wrap their minds around is the amount of hardworking taxpayers’ money that the federal government spends on an annual and daily basis. In fiscal year 2015, the federal government spent $3,700 billion (or $3.7 trillion), which is more than $10 billion per day.
The spending bill, which is more than 2,000 pages long, contains funding for numerous programs that largely benefit particular interest groups at the expense of taxpayers and the broader economy. This week’s holiday-themed graphic singles out 12 examples, but it by no means represents all of the gifts for special interests contained in the bill. Although the individual sums are not large relative to the overall spending contained in the bill, the examples highlight the problem with a federal government that faces few limits on how it can spend taxpayer money.
Americans have become increasingly aware of the detrimental role of cronyism—in their lives and the economy in general—where certain industries extract privileges from the federal government. That means that the federal sugar racket, which clearly benefits the few at the expense of many, should be a prime target of policymakers looking to chip away at “corporate welfare.”…
This week’s chart looks at total OCO funding from fiscal year (FY) 2001 to projected FY 2016, which amounts to a cumulative $1.75 trillion. Of that amount, 92 percent has gone to the Pentagon and the rest went to the State Department, US Agency for International Development, and the Department of Veterans Affairs.
The Bipartisan Budget Act of 2015, freshly signed into law by President Obama, suspends the $18.1 trillion federal debt ceiling until March 2017. It also busts the 2011 Budget Control Act—which I previously discussed—for the second time. It does so by raising the caps on discretionary funding by $50 billion for fiscal year (FY) 2016 and $30 billion for FY 2017.