A new report by the Government Accountability Office indicates that approximately 10 percent of the federal deficit could be erased just by ending improper payments.
Further, when coupled with a crackdown on outright fraud, the federal deficit could be cut by hundreds of billions more.
The GAO said that in fiscal year 2025, 15 federal agencies made approximately $186 billion in improper payments across 64 programs, an increase of $24 billion from the previous fiscal year.
The federal deficit was $1.8 trillion last year, and is projected to be $1.9 trillion this fiscal year, according to the Congressional Budget Office, so $186 billion represents about 10 percent of that total.
Last year, the biggest offender programs for improper payments were Medicare, coming in at $57 billion, followed by Medicaid at $37 billion, the earned income tax credit at $21 billion, and the Supplemental Nutrition Assistance Program (SNAP) with $10 billion.
There were an estimated $186 billion in improper payments made last year by the federal government, with the Medicare and Medicaid programs being the top offenders. pic.twitter.com/eHHzSwzJ2s
— Randy DeSoto (@RandyDeSoto) May 26, 2026
Could we balance the budget if we fixed waste and fraud and cut overly generous welfare programs?
Yes: 100% (15 Votes)
No: 0% (0 Votes)
“Improper payments have been a government-wide issue for more than 20 years, with estimates since FY 2003 at about $3 trillion,” the GAO added.
The agency contrasted improper payments with fraudulent ones, explaining, “Fraud is obtaining something of value through willful misrepresentation.”
Meanwhile, “Improper payments are payments that should not have been made or that were made in the incorrect amount; typically they are overpayments. While all fraudulent payments are considered improper, not all improper payments are due to fraud.”
Kristen Kociolek, the managing director of GAO’s Financial Management and Assurance team, noted that the worst period for improper payments was during the COVID pandemic from 2020 to 2023, because the new spending programs rolled out at the time meant an increased likelihood of significant amounts of money going to the wrong place, The Washington Times reported.
She added regarding the $24 billion increase in improper payments last year that it is “concerning to see the amounts of improper payments starting to increase again with the federal government not facing these emergency risks.”
President Donald Trump recently placed Vice President J.D. Vance in charge of the administration’s efforts to root out fraud.
During a task force meeting at the White House Tuesday, Deputy Chief of Staff Stephen Miller argued that government programs have been set up based on an honor system.
“They are set up based on the idea that you could trust the average person, through their own morality, to abide by the rules and comply with the law,” he said, arguing that people have taken advantage of that trust to the tune of hundreds of billions of dollars.
Holy smokes. Stephen Miller says he believes that the fraud and waste being uncovered by the Anti-Fraud Taskforce is so widespread, that dealing with it could balance the budget:
“This is the fastest in history that a government task force has traveled from creation to action.”… pic.twitter.com/desds4hGyG
— Andrew Kolvet (@AndrewKolvet) May 26, 2026
“I believe, based on what I’ve seen, from what I’ve heard, that we could balance the federal budget if the only dollars that went out of the Treasury went to individuals who were properly, lawfully, correctly eligible to receive them,” Miller concluded.
SpaceEx CEO Elon Musk, who oversaw the Department of Government Efficiency last year, estimated at the time that roughly 20 percent of all federal government spending goes toward fraud and waste, presumably including improper payments.
So Godspeed to Vance’s task force. The future financial stability of the country relies on controlling spending, in large part by rooting out waste and fraud.
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