Heritage Foundation Leadership for America

• The federal government cannot account for $24.5 billion spent in 2003.
   
• A White House review of just a sample of the federal budget identified $90 billion spent on programs deemed that were either ineffective, marginally adequate, or operating under a flawed purpose or design.
   
• The Congressional Budget Office published a “Budget Options” book identifying $140 billion in potential spending cuts.
   
• The federal government spends $23 billion annually on special interest pork projects such as grants to the Rock and Roll Hall of Fame, or funds to combat teenage “goth” culture in Blue Springs, Missouri.
   
• Washington spends tens of billions of dollars on failed and outdated programs such as the Rural Utilities Service, U.S. Geological Survey and Economic Development Association.
• The federal government made $20 billion in overpayments in 2001.
   
• The Department of Housing and Urban Development’s $3.3 billion in overpayments in 2001 accounted for over 10 percent of the department’s total budget.
   
• Over one recent 18-month period, Air Force and Navy personnel used government-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.
   
• Examples of wasteful duplication include: 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; and 72 federal programs dedicated to assuring safe water.
   
• The Advanced Technology Program spends $150 million annually subsidizing private businesses, and 40% of this goes to Fortune 500 companies.
   
• The Defense Department wasted $100 million on unused flight tickets, and never bothered to collect refunds even though the tickets were reimbursable.
   
• The Conservation Reserve program pays farmers $2 billion annually to not farm their land.
   
• Washington spends $60 billion annually on corporate welfare, versus $43 billion on homeland security.
   
• The Department of Agriculture spends $12 billion to $30 billion annually on farm subsidies, the vast majority of which go to agribusinesses and farmers averaging $135,000 in annual income.
   
• Massive farm subsidies also go to several members of Congress, and celebrity “hobby farmers” such as David Rockefeller, Ted Turner, Scottie Pippen, and former Enron CEO Ken Lay.
   
• The Medicare program pays as much as eight times the cost that other federal agencies pay for the same drugs and medical supplies.
   
• Congressional investigators were able to receive $55,000 in federal student loan funding for a fictional college they created to test the Department of Education.
   
• The Army Corps of Engineers has been accused of illegally manipulating data to justify expensive but unnecessary public works projects.
   
• Food stamp overpayments cost $600 million annually.
   
• School lunch program abuse costs $120 million annually.
   
• Veterans’ program overpayments cost $800 million annually.
   
• Earned Income Tax Credit (EITC) overpayments cost $9 billion annually.
   
• Better tracking of student loan recipients would save $1 billion annually.
   
• Preventing states from using accounting tricks to secure additional Medicaid funds would save several billion dollars annually.
   
• Medicare contractors owe the federal government $7 billion.

Sources: see Brian M. Riedl, “How to Get Federal Spending Under Control,” Heritage Foundation Backgrounder No. 1733, March 10, 2004, at http://www.heritage.org/Research/Budget/bg1733.cfm.

Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.