New Federal Reforms Target Billions In State Fraud And Waste

By Christopher Jacobs | Commentary, The Federalist

A recurring theme of public policy — one that leftists often ignore — is how people respond to incentives. If the federal government runs programs that give individuals carte blanche to steal, then some unscrupulous actors will exploit those weaknesses to do so.

But those incentives go beyond individuals and also extend to the fight against waste, fraud, and abuse. In many cases, states have taken little action to crack down on fraud and waste within government programs because the federal government provides the bulk of the funding for said programs. If Washington gives states a blank check regardless of whether they crack down on fraud, why shouldn’t those states embrace actions that bring their area more taxpayer dollars, even if those dollars come from illicit activity?

Thankfully, provisions in last year’s budget bill will realign many of those skewed incentives, which should help to change the tide over time. But a recent congressional hearing showed the scope of the problem our nation faces.

Rampant Waste

A recent subcommittee hearing of the House Oversight Committee examined fraud in programs funded by the federal government but run by states. In that hearing, one state official’s testimony quantified the problem and the potential savings from more robust anti-fraud measures.

READ THE FULL ARTICLE AT THE FEDERALIST

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