Thompson Details $220 Billion in Government Waste — $35 Billion Lost in FY98 Alone

Washington, DC – Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN) today released an alarming compilation of government waste detailing $220 billion in taxpayer losses. In 1998 alone, $35 billion in taxpayer dollars was lost due to government waste, fraud, abuse and mismanagement.

“One of the reasons people are losing faith in the government is because it can?t be counted on to spend taxpayer dollars properly,” Senator Thompson said. “In just one year, the federal government squandered $35 billion. That?s real money, even in Washington. We?ve got to hold these agencies? feet to fire and make them more accountable.”

It’s difficult to track exactly how much the federal government loses to waste, fraud, abuse and mismanagement primarily because federal agencies are not required to keep this information and most don?t. With input from the agencies? Inspectors General, the Committee was able to uncover $35 billion in wasted 1998 taxpayer dollars and $220 billion overall.

The Committee?s compilation of government waste includes:

  • Defense Dept. maintained $11 billion in inventory it didn?t need;

  • Energy Dept. invested $10 billion in projects that they never completed;

  • Education Dept. paid out $3.3 billion in student loans that students failed to repay;

  • Agriculture Dept. sent out $1.4 billion in food stamps to ineligible recipients.


In November of last year, Senator Thompson released a GAO report that identified $19.1 billion wasted by just nine federal agencies in Fiscal Year 1998 alone. Today?s compilation provides a more comprehensive look at the problem of government waste overall, and specifically for Fiscal Year ?98.

Senator Thompson said he will continue to insist that agencies provide greater disclosure of government waste. In doing so, he will attempt to force agencies to establish specific performance goals to reduce this waste in an effort to restore taxpayer faith in government.



>No one knows how much the federal government loses to fraud, waste, abuse, and mismanagement. Federal agencies do not routinely track or quantify the costs of these problems. The following table compiles some dollar amounts that have been documented in recent Inspector General and GAO reports. These figures include actual or estimated direct losses to fraud, waste and error as well as amounts that could be realized by improved management. Some of the figures represent annual losses, some are cumulative, and some represent the time periods covered by particular IG or GAO reviews.

The total is over $220 billion. This includes about $35 billion for one fiscal year. However, since figures for fraud, waste, and abuse are not generally available, this amount surely is understated.


(In millions)


Explanation and Reference



Reported Food Stamp Program overpayments for FY 1998. (GAO/AIMD-00-10, p. 6)



Improper research expenditures. (Agriculture IG letter, 1129/99, encl., pp. 5-6)



National Technical Information Service (NTIS) cumulative losses, FY 1995-98. (Commerce IG letter, 12/13/99, encl., p. 16)



Amount the National Oceanic and Atmospheric Administration (NOAA) spends annually on its in-house aircraft above comparable private sector costs. (Commerce IG letter, 12/13/99, encl., p. 19)



DOD?s inventories contain $11 billion for which Defense has no need; the Navy wrote off $3 billion of inventory as lost in transit. (GAO/T-NSIAD-99-83, pp. 4, 7-8)



New inventory ordered by DOD one year in excess of its current needs. (GAO/T-NSIAD-99-83, pp. 5)



Potential annual fraud and abuse in the military health care program, TRICARE. (GAO/HEHS-99-142, p. 2)



Between fiscal years 1994 and 1998, DOD contractors voluntarily returned $984 million that DOD had erroneously paid them. (GAO/AIMD-00-10, p. 18)



In FY 1997, the federal government paid out more than $3.3 billion to make good its guarantee on defaulted student loans. (GAO/OCG-99-5, p. 7)



Estimated Pell Grant overpayments during 1995-96 caused by under-reporting of income. (Education IG letter, 12/8/99, encl., p. 6; IG Report ACN: 11-50001 (January 1997))



From 1980 through 1996, the Department of Energy terminated before completion 31 major systems acquisition projects after expenditures of over $10 billion. (GAO/OCG-99-6, p. 12)



Estimate of Medicare fee-for-service overpayments for FY 1998. HHS IG letter, 12/7/99, encl., p. 5; GAO/AIMD-00-10, p. 6)



Improper Medicare payments in 1998 for rehabilitation services. (HHS IG letter, 12/7/99, encl., pp. 7-8)



HUD estimates erroneous rent subsidy payments at $857 for FY 1998, or about 5% of all payments. (HUD IG report 99-FO-177-0003, p. 24; GAO/AIMD-00-10, p. 6)



Revenues lost as a result of changes in Interior irrigation assistance repayment policies. (Interior IG letter, 12/1/99, encl., p. 17)



Amount by which fluid mineral royalties may have been underpaid. (Interior IG letter, 12/1/99, encl. 1, p. 21)



Losses identified in various IG reviews based on fees that Interior failed to collect or misused. (Interior IG letter, 12/1/99, encl., pp. 16-17)



Losses on land exchanges that did not comply with applicable requirements. (Interior IG letter, 12/1/99, encl., p. 23)



Cumulative cost overruns on the International Space Shuttle. (NASA IG letter, 12/1/99, encl., p. 13)



Cost of 1% premium surcharge OPM has paid carriers (so far) to cover their costs resulting from enrollment discrepancies in the Federal Employees Health Benefit Program. This figure represents the government?s share; plan subscribers have paid another $11.9 million. (OPM IG letters of 12/1/99, encl., p. 4, and of 1/7/00, p. 1)



Estimated annual losses to fraud, waste, and abuse in the Federal Employees Health Benefit Program. (OPM IG letter, 12/1/99, encl., p. 6)



Cost of defaulted SBA-guaranteed loans for which the guarantee should not have been honored. (SBA IG letter, 12/2/99, encl. p. 1)



Cost of additional questionable SBA-guaranteed loans. (SBA IG letter, 12/2/99, encl. p. 4)



Value of Section 7(a) loans that are under criminal investigation and may have been procured by fraud. (SBA IG letter, 12/2/99, encl. p. 20)



Estimated loss to the government from loans procured by false certifications. (SBA IG letter, 12/2/99, encl. p. 1)



SSA reported $2.5 billion in gross receivables for Supplemental Security Income (SSI) overpayments. This includes $1.65 billion in new overpayments for FY 1998, out of total payments of $27 billion. (GAO/AIMD-00-10, pp. 6, 17)



Reported Old Age and Survivors Insurance overpayments for FY 1998. (GAO/AIMD-00-10, p. 6)



Reported Disability Insurance overpayments for FY 1998. (GAO/AIMD-00-10, p. 6)



Revenues that Customs and ATF failed to collect. (Treasury IG letter, 12/13/99, encl. 1, pp. 7-8)



Unpaid taxes that are supported by taxpayer agreements or court rulings. (GAO/HR-99-1, pp. 108-190)



Estimated annual Earned Income Tax Credit (EITC) overpayments. (Treasury Tax IG letter, 12/1/99, encl. p. 9)



Estimated annual benefit overpayments from failure to deduct disability compensation from military reserve pay. (VA IG letter, 12/10/99, encl., p. 6)



Estimated erroneous benefit payments to prisoners and deceased persons.(VA IG letter, 12/10/99, encl., pp. 6-7)



Estimated savings that could be realized from improved debt management.(VA IG letter, 12/10/99, encl., p. 10)



Estimated future savings that could be realized by better oversight of Federal Employees Compensation Act claims. (VA IG letter, 12/10/99, encl., p. 12)


Multiple agencies

At the close of fiscal year 1998, delinquent non-tax debt totaled $60 billion. This is an $8.1 billion increase from FY 1996. (OMB Federal Financial Management Status Report and Five Year Plan, June 1999)


Multiple agencies

According to Congressional Budget Office cost estimates, a series of GAO recommendations to improve the economy and efficiency of various government operations would save $6.5 billion in annual budget authority. (GAO/OCG-99-26)


Multiple agencies

Reported overpayments for Veterans Benefits, Unemployment Insurance, and others for FY 1998. (GAO/AIMD-00-10, p. 6)



Estimated annual savings that could be realized by consolidating most federal in-house aircraft operations. (Commerce IG letter, 12/13/99, encl., p. 19)