The White House says it’s identified more than $2 billion in savings in the first few months of its efforts to cut government spending as President Obama tries to show Congress that he’s serious about budget reform.
A new program targeting improper payments made by the Medicaid program is expected to save the federal government $2 billion in the next five years, the White House said Wednesday in an announcement pegged to the first Cabinet-level meeting on cutting federal costs.
Vice President Biden will chair the meeting, on the orders of an executive order issued by Obama in June when he launched his anti-waste campaign and required Cabinet secretaries to identify ways to scale back.
In advance of Wednesday’s meeting, the White House touted several projects under way long before Obama launched his campaign as evidence that the administration is actively seeking cuts.
A new Medicaid contractor auditing program established by last year’s health-care reform legislation is forecast to save $2 billion in the next five years as it unearths payments improperly made to fraudulent contractors and beneficiaries. The program has recovered $670 million in improper payments so far this year, White House officials said. Eventually, about $900 million of the savings will be returned to state government coffers.
At the Labor Department, officials are planning to distribute about $192 million in grants to state governments to help them more accurately track the employment status of people receiving unemployment insurance. Roughly 11 percent of federal unemployment insurance payments are improperly paid to people who either no longer qualify for the program or lied on their applications, officials said Wednesday.
Improper payments — made to delinquent contractors or to people fraudulently accepting federal benefits payments — totaled $125 billion across the federal government in fiscal 2010, up considerably from the previous year. In response, federal agencies have been working since early 2010 to reduce such payments.
Obama’s anti-waste orders also require departments to reduce travel budgets, office supply costs and subscriptions to print publications — which officials admit are small, but noticeable ways to pare back.
Homeland Security officials said Wednesday they’ve been working since early 2009 to save money by using online meeting tools or government office space instead of privately-owned conference facilities for large meetings. They’re also posting documents online for review instead of printing copies and — to the detriment of the publishing industry — significantly reducing subscriptions to print publications since most of the content is available online.
The June launch of the new White House campaign came shortly after a widely-read government report found that federal agencies spend billions annually on overlapping offices and responsibilities, including more than 100 programs dealing with surface transportation issues and 15 agencies or offices with food safety oversight.
The anti-waste efforts also began shortly before Biden began meeting with congressional leaders to find ways to pay down the federal deficit. With the new congressional supercommittee now holding meetings, Wednesday’s announcement appears designed by administration officials to demonstrate they’re doing what they can to find savings.
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Government made $125B in improper payments last year (Nov. 16, 2010)