Obama signs legislation to cut improper government spending, largely in Medicare and Medicaid

Jul 23 2010

President Barack Obama signed legislation Thursday that aims "to take on fraudulent and improper government spending that he said diverts money from important priorities," the Los Angeles Times reports.

According to the Office of Management and Budget, the majority of improper payments come from Medicare and Medicaid. "The legislation targets instances in which the federal government pays the wrong amount, pays the wrong recipient or pays at the wrong time, according to the Obama administration. The new law would open the door to private audits and reduce the dollar amount that would prompt an agency to investigate misspending. The law would add sanctions for programs that do not comply. … Obama noted that the legislation passed the House and Senate unanimously." OMB "estimates that improper federal payments, including those to jailed or dead individuals or contractors barred from doing business with the government, cost the U.S. $98 billion in 2009" (7/22).

The Washington Post: "But the Improper Payments Elimination and Recovery Act that Obama signed requires agencies to spend at least $1 million on audits to identify potential overpayments, produce plans to cut such overpayment errors and sets penalties for agencies that fail to comply. 'It means cutting down on waste, fraud and abuse and ensuring that our government serves as a responsible steward of the tax dollars of the American people,' Obama said before signing the bill" (O'Keefe, 7/22).