The Federal Waste Problem
Published: February 2025
These are not our estimates — this is the government's own auditor saying this.
$233–521B Lost to Fraud Annually
GAO estimate, 3–7% of federal obligations
$2.8T in Improper Payments
Cumulative since FY2003
$162B in Improper Payments FY2024
68 programs across 16 agencies
75% Concentrated in 5 Programs
Medicare, Medicaid, EITC, SNAP, Unemployment
The federal government cannot account for where hundreds of billions of your tax dollars go each year. This is not a partisan talking point — it is the conclusion of the Government Accountability Office, the government's own auditor, in report after report, year after year.
Fraud vs. Waste vs. Abuse
These terms get thrown around interchangeably, but they mean different things. Understanding the distinction matters because the solutions are different for each.
Fraud
Intentional deception or misrepresentation to obtain an unauthorized benefit. Someone knowingly lies to get money they are not entitled to — a contractor billing for work never performed, a recipient faking eligibility. This is criminal.
Improper Payments
Any payment made in the wrong amount, to the wrong recipient, or without proper documentation. Not all improper payments are fraud — many are bureaucratic errors, duplicate payments, or documentation failures. But the money is still gone.
Waste
Unnecessary spending that could have been avoided with better management. No one committed a crime — the system just spent more than it needed to. Overpaying for services, duplicating programs across agencies, or buying things nobody uses.
Abuse
Behavior that is deficient or improper when compared with what a reasonable person would consider acceptable. Using government resources for personal benefit, exploiting authority to bend rules — not technically illegal, but a misuse of the public trust.
Definitions based on GAO standards and the Standards for Internal Control in the Federal Government.
The Scale of the Problem
In 2024, the GAO published GAO-24-105833, a comprehensive assessment of fraud risks across the federal government. The headline finding: 3–7% of total federal obligations are lost to fraud each year.
Applied to the current federal budget, that translates to $233 billion to $521 billion lost annually. Not misallocated. Not debatable. Lost — to fraudulent claims, fake recipients, and payments that should never have been made.
The GAO has maintained a "High Risk List" of federal programs vulnerable to waste, fraud, and abuse since 1990. The list currently includes 37 areas. Some have been on the list for over 30 years — the problems are identified, documented, and then ignored.
$233–521 billion per year. That is more than the entire federal education budget. More than the Department of Homeland Security, the State Department, and NASA combined. And it happens every single year.
Improper Payments Exposed
In FY2024, the federal government reported $162 billion in improper payments across 68 programs at 16 agencies. Three-quarters of that total is concentrated in just five program areas.
Medicare
Fee-for-Service and Advantage
Medicaid
Federal and state jointly administered
Earned Income Tax Credit
EITC — IRS-administered
Supplemental Nutrition (SNAP)
Formerly food stamps
Unemployment Insurance
State-administered, federally funded
$2.8 Trillion Since 2003
The federal government has reported $2.8 trillion in cumulative improper payments since agencies were first required to track them in FY2003. That number only includes what agencies self-report — the actual total is almost certainly higher. These are not rounding errors. This is a structural failure of financial management at the largest scale imaginable.
Why This Matters
This is why efficiency efforts exist. When the government loses hundreds of billions per year to fraud, waste, and improper payments, every conversation about federal spending is incomplete without acknowledging the money that simply disappears.
The Department of Government Efficiency (DOGE) was created to address exactly this problem — to audit, cut, and hold agencies accountable. Whether it succeeds depends on political will, but the data is clear: the status quo is indefensible.
Every dollar lost to fraud is a dollar that could have funded schools, repaired infrastructure, or been left in taxpayers' pockets. The question is not whether we can afford accountability — it is whether we can afford to keep ignoring half a trillion dollars in annual losses.
The government's own auditors have been documenting these failures for decades. The numbers are public. The reports are published. The question has never been whether the waste exists — it is why nothing changes.