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.