The federal government runs more than 2,300 subsidy programs, and they are all susceptible to fraud and other types of improper payments. The EITC program, for example, throws about $18 billion down the drain each year in such payments.
Perhaps the program that generates the most outrageous rip‐offs is the $150 billion Social Security Disability (SSDI) program. From the Washington Post today:
Eric Conn, the fugitive attorney who pleaded guilty to orchestrating a scheme to defraud the federal government of $600 million, remains at large since he cut off his court‐ordered GPS monitoring bracelet on June 2…Conn in March entered guilty pleas to defrauding the Social Security Administration via bribes he paid to a doctor and a judge to process and approve his clients’ disability claims.
From 2006 to 2016, Conn processed 1,700 client applications for Social Security benefits with a potential of $550 million in lifetime benefits. Since the revelation of the allegations, the Social Security Administration has contacted many of Conn’s former clients with claims they owe as much as $100,000 for disability payments going back 10 years unless they can prove they have been disabled the entire time…
Conn’s fraud scheme was fueled by television advertisements that included a 3-D television ad from 2010 and one from 2009 in which Conn hired YouTube star “Obama Girl” and Bluegrass music legend Ralph Stanley to sing a version of “Man of Constant Sorrows” with new lyrics that refer to Conn as a “superhero without a cape” and to brag that Conn had “learned Spanish off of a tape.” In a rap video, Conn billed himself as Hispanic‐friendly: “Even if you’re Latino, no need to worry cuz this gringo speaks the lingo.”
One greedy lawyer, a corrupt doctor and judge, some jingoism, and our government gets ransacked for $600 million. That’s not very comforting to taxpayers, is it?
In his study of SSDI for DownsizingGovernment.org, Tad Dehaven said, “SSDI is a classic example of a well‐intentioned effort to provide modest support to truly needy people that has exploded into a massive entitlement that is driving up the federal deficit.”
DeHaven proposed these SSDI reforms:
- Cut the program’s average benefit levels.
- Impose stricter eligibility standards to discourage claims from people who should be working.
- Create a longer delay for the initial receipt of benefits to discourage frivolous applications.
- Reduce the large number of appeals for people initially denied benefits.
- Ensure greater quality control and consistency of decisions by officials and judges.
- Create a “taxpayer advocate” in the administrative law process to challenge dubious claims made by applicants and their lawyers.
- Apply continuous disability reviews of people receiving benefits in a more vigorous manner.
His study is here.