While the Obama Administration celebrates the accomplishments of yet another bloated government program—this one providing low-income populations with taxpayer-funded housing—a federal audit exposes the darker side of the costly welfare endeavor.
Known as Rural Housing Service (RHS), the program is responsible for providing safe, sanitary and affordable housing for very-low-income, low-income and moderate-income rural families. The publicly-financed services are delivered through a wide range of housing programs, including those that support single-family home ownership, multi-family rental housing and farm labor housing.
This ends up costing U.S. taxpayers tens of billions of dollars annually for rent subsidies and guaranteed, low-interest home loans for residents of rural areas who otherwise couldn’t afford it. Just this week a member of Obama’s cabinet touted an RHS development in Ohio as an example of the program’s many triumphs. “Since taking office, President Obama’s Administration has taken historic steps to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities,” according to an announcement that also reminds the country about Obama’s “first-ever White House Rural Council.”
The idea is to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. That’s why Uncle Sam has invested north of $170 billion in the RHS program, which includes a national network of state and local offices. It sounds like a noble cause but it’s rife with fraud and corruption that’s so deep-rooted, the magnitude may never really be known.
At least that’s what the Government Accountability Office (GAO), the nonpartisan agency that conducts congressional probes, seems to indicate. In a lengthy report made public this week, the GAO identifies tens of millions of dollars in “improper rental assistance payments” within the RHS program during a three-year period sampled. The cause appears to be “inaccurate calculations of tenant subsidies and incomplete supporting documents.”
The report only addresses the RHS’s rental division, which doled out about $1 billion in fiscal year 2011 to help more than 270,000 low-income rural tenants afford housing. On a positive note, from fiscal years 2007 through 2010, RHS managed to reduce its “error rate” from $35 million to $15 million, saving American taxpayers a whopping 20 million bucks.
Actually, these figures are just a sort of guesstimate because congressional investigators admit they have no real way of knowing the true magnitude of the “improper payments.” Therefore, they logically conclude in their report that the “figures may be understated” and taxpayers could very well be getting cheated out of much more.
The GAO includes all sorts of informative graphs and charts in its findings, but it’s not necessary to sort through all of it to get the bottom line; corruption in a bloated welfare program. This seems to be par for the course for the Obama Administration. Among the recommendations the GAO makes to correct the problem; hold agency managers accountable for reducing improper payments. Now, there’s an innovative idea for government.
In a shameful—and costly—example of government incompetence, a special program created to combat Medicaid fraud has cost American taxpayers more than five times the amount of overpayments it has identified.
That means the anti-fraud project, known as National Medicaid Audit Program, has cost the U.S. government $102 million to operate since 2008 while identifying only $19.4 million in overpayments. It seems like a bad joke, but unfortunately it’s not. Instead it’s one of many examples of government inefficiency that ends up sticking it to the people.
The idea behind the National Medicaid Audit Program was a good one. It was launched to tackle a monstrous epidemic of fraud and overbilling in the joint federal-state healthcare program for the poor. Medicaid has the second-highest (Medicare, the government’s health insurance program for the elderly is first) estimated improper payments of any federal program. In fact, the feds say that $21.9 billion of Medicaid’s federal expenditures of $270 billion in fiscal year 2011 involved improper payments.
That means the government paid for medically unnecessary treatments and services or procedures not covered by the program. In some cases the service or treatment was billed but never provided. It’s bad situation for everyone. So what does the government do? Create yet another deficient program to police the corruption. Problem is that a bunch of idiots were apparently hired to run it.
At least that’s what most people will likely conclude after reading a federal audit about the Medicaid anti-fraud program published this week by the nonpartisan Government Accountability Office (GAO), which serves as the investigative arm of Congress. In a nutshell, the National Medicaid Audit Program uses incomplete federal data to crack down on fraud so the majority of probes failed to find any, even when it was there.
You can’t make this stuff up! It’s all laid out in the GAO’s 43-page report. It’s not like the Medicaid fraud patrol is in denial that using incomplete data doesn’t cut it. Its own figures show that audits that used incomplete data only identified overpayments 4% of the time. This is why the program is moving toward a “collaborative approach” in which complete data is considered to identify potential fraud. So now they use this new approach and guess what? It works better and uncovered more than $12 million in overpayments right off the bat. Imagine that.
Enraging examples of government blowing taxpayer dollars abound, but this could easily take the cake; Uncle Sam has spent north of $2 billion to subsidize the advertising costs of wealthy private American companies and trade groups overseas.
In the meantime, the U.S. economy has amassed a record $15.6 trillion debt while the firms benefitting from publicly-financed ads have seen their profits grow immensely. Among them are some of the country’s biggest brand names and most profitable trade associations. They include Welch’s, Sunkist, Blue Diamond and the multi-billion-dollar California wine industry.
Under a little-known initiative called Market Access Program (MAP) the U.S. government uses tax dollars to help them promote their private market goods to foreign buyers. As unbelievable as this may seem, it’s all laid out in a report (appropriately titled “Treasure Map: The Market Access Program’s Bounty of Waste, Loot and Spoils Plundered from Taxpayers”) released this week by an Oklahoma senator who’s calling for much-needed reform.
The question, of course, is why has it taken so long for an elected official to question this deplorable program? In 2012 alone, the businesses got more than $6 million from the government for overseas product promotion, the report says. It’s not like they’re hurting and need the public assistance. These are established, big-time firms that combined make billions of dollars in sales. Yet the American public paid for promotional ads such as reality television shows in India, wine tastings for foreign journalists and pet food and shampoo commercials.
Here is a breakdown of some of the report’s key findings; one of the world’s largest fruit sellers, Sunkist Growers with annual sales exceeding $1.2 billion, has received $34.1 million since 1999 for overseas advertising. California raisin growers got $31.7 million since 1998 to promote their product internationally and Blue Diamond Growers, the world’s largest almond producer, got more than $28 million during the same period. A reality television fashion and design show in India got $20 million to promote cotton.
Even the nation’s profitable candy and liquor companies get cash from the government to promote their products abroad via their respective trade groups. The National Confectioners Association, which includes Hershey’s, Godiva and Mars (Snickers, M&Ms) has received more than $14 million in the past decade, including $1.3 million in 2012. The country’s liquor trade group, Distilled Spirits Council of the United States (DISCUS), gets around $200,000 annually to court importers, nightclub owners and bartenders in Russia, the Czech Republic, China, India, South Korea and Brazil.
The United States government has finally pulled the plug on a preposterous, $20 million project to develop a Pakistani version of the iconic educational children’s program Sesame Street.
Should American taxpayers be relieved that the government finally killed the abominable three-year project or outraged that it existed in the first place? It’s not like money wasn’t wasted. In less than a year, the failed Pakistani Sesame Street project burned $6.7 million, according to a State Department spokesman quoted by the Arab-language news network.
So why did the feds nix the project? They received “credible allegations” of fraud and corruption at the Pakistan-based company (Rafi Peer Theater Workshop) Uncle Sam hired to produce a local version of the kids’ show. The feds immediately launched an investigation and fired off a letter terminating the agreement, according to the news report. Still, the Pakistani version of Sesame Street, known as “Sim Sim Hamara,” aired for nearly a year at U.S. taxpayer expense.
Pakistan Sesame Street was part of a broader, U.S. program to improve education and increase tolerance worldwide. Americans have doled out millions to create Sesame Street in nearly two dozen countries, including Islamic nations such as Indonesia, Egypt and Bangladesh. The cash is distributed by the U.S. Agency for International Development (USAID), a famously bloated entity that claims to advance the nation’s foreign policy goals by providing economic, development and humanitarian assistance around the world.
The Indonesian Sesame Street (Jalan Sesama) came about as part of a six-year, $157 million initiative, promoted by President George W. Bush, to improve education in the southeastern Asian country. Under that plan, $8.5 million went to a New York-based company that developed and produced an “Indonesia-specific version” of the children’s program. Jalan Sesama actually “helps to strengthen school readiness for millions of children,” according to USAID, and strengthens early childhood education and development.
The Arabic Sesame Street series (Alam Simsim) broadcast in Egypt cost $8.4 million. The U.S. hired an Egyptian company called Karma Production to create that country’s version of the original series, which first aired in 1969. Egypt’s special version is set in a “typical Egyptian street” and reflects the country’s rich culture and tradition, modeling mutual respect and understanding,” according to USAID.
While President Obama calls on companies to insource overseas jobs back to the U.S., the federal government is spending millions of dollars to help foreigners learn enough English to work in offshore call centers for American businesses.
The U.S. Agency for International Development (USAID) is blowing $10 million to train Filipinos to work in Asian call centers that serve the very U.S. businesses the president threatened to strip of tax deductions for moving jobs and profits abroad. In fact, in hisState of the Union address earlier this year, Obama said “it is time to stop rewarding businesses that ship job overseas.”
Ironically, his administration is contributing to the problem. A news magazine that covers information technology broke the story last week and it has ignited bipartisan outrage among federal lawmakers. So far two congressmen—one Democrat, one Republican—have demanded that the federally-funded call-center training program be immediately suspended. They cite a similar USAID project in Sri Lanka that was abandoned in 2010 at their behest.
This latest project is training 3,000 Philippine students to man the phones in areas ranging from healthcare to travel, for domestic call centers from Asia. It’s called Job Enabling English Proficiency (JEEP) and graduates get placed with outsourcing vendors that provide U.S. companies with profitable offshore perks, including Asia’s cheap labor costs. The U.S. program includes 400 hours of training over two years and 23,000 students are currently enrolled in the Philippines.
One of the congressmen demanding that the Philippine JEEP be nixed, New York Democrat Tim Bishop, notes that over 4.5 million Americans work in call centers but more than half a million jobs have been outsourced from the U.S. to foreign nations. “I support the international development mission of USAID but my top priority is protecting American jobs and American taxpayers,” Bishop said. “I anticipate working closely with USAID in a bipartisan manner to ensure that none of its programs overseas will hurt workers here at home.”
Bishop and North Carolina Republican Walter Jones co-authored a letter to Obama’s handpicked USAID Administrator, Rajiv Shah, calling for JEEP’s end. “We cannot support the use of federal taxpayer dollars for outsourcing training programs that conflict directly with the Administration’s stated policy of repatriating American jobs from overseas and we demand that this ill-advised project be discontinued immediately.”
Both have threatened to use every legislative option available to permanently prohibit USAID from engaging in such practices in the future. Actively funding the training of foreign workers for call center jobs outsourced by American companies is “extraordinarily distressing” given the fragile state of the recovering American labor force,” the congressmen write.
In a laughable story that illustrates how dense government can be, a taxpayer-funded program that feeds low-income children free breakfast in public schools is causing concern about child obesity.
That’s because, as it turns out, some kids are “double-dipping” or eating twice in the morning, according to a national newspaper report. They have breakfast at home before going to school, then again once they are in class on taxpayer dime. This seems to indicate that the government could save some money by eliminating the program all together.
After all, the government offers free school breakfast in poor neighborhoods because kids supposedly come to class hungry and unable to concentrate on their studies. It’s a way to improve their academic performance, according to the experts running the nation’s ailing public education system. Under this argument, obesity would certainly not be an issue. Kids that go hungry and need the government to step in for a meal or two aren’t usually fat.
In this particular case, several large urban school districts offer free breakfast in the classroom—rather than the cafeteria—to ensure that food reaches the mouths of hungry children from low-income families. This eliminates the stigma of going to the cafeteria to get the free meal, which has been available for years at virtually all of the nation’s public schools.
As a result of the new classroom convenience, the number of students who eat free breakfast has tripled in certain districts, according to the news report that also reveals other striking stats related to the program; absenteeism has dropped in Los Angeles and Chicago officials say kids from low-income families are eating healthier meals more often. Let’s get out the pompoms!
Not so fast. In a major U.S. city like New York, health officials are hesitant about expanding the region’s free classroom breakfast program because children might be “inadvertently taking in excess calories by eating in multiple locations.” This could contribute to the child obesity epidemic that’s become the focus of Michelle Obama’s costly national campaign. The First Lady even managed to get Congress to pass a multi-billion-dollar law to improve the inner-city diet, largely to tackle childhood obesity.
Nearly half of New York’s elementary and middle-school students are overweight or obese, according to a public health official quoted in the news story. Thus the concern in expanding a free meal program created for malnourished kids from poor families that can’t afford food. Parents from low-income New York schools who were interviewed for the piece expressed concern that their kids were getting breakfast in class because they eat at home every morning.
One mother said she actually reduced what her five-year-old eats at home because he has a second breakfast at school. This obviously creates doubts about the need for this taxpayer-funded meal program. Uncle Sam is already feeding a record 45 million people via food stamps and the number is quickly growing, according to the most recent government figures.
Following a laughable United Nations declaration that high-speed internet access is a basic human right, the Obama Administration is investing north of $400 million to expand broadband into poor, rural areas of the U.S.
The president has long asserted that broadband access is essential for communities to compete on a “level playing field” and he’s included it among the necessities to improve the lives of rural Americans. The agency in charge of distributing the money—the U.S. Department of Agriculture (USDA)—took it a step further this week, asserting that high speed internet connections will help low-income residents in a variety of unimaginable areas.
For instance, it will “improve healthcare and educational opportunities,” according to Obama’s Agriculture Secretary Tom Vilsack. Broadband will also help the poor “connect to global markets,” Vilsack said, and it will provide “much-needed services to rural businesses and residents.” The investment, presumably on the part of the government, will also “increase jobs” in rural areas, Vilsack assures.
Utility companies in 15 states will receive a combined $410.7 in grants from Uncle Sam to install or upgrade connections in rural and low-income areas that currently don’t have internet access or only have slow, dialup connections. Among them are companies in North Dakota, Minnesota, Colorado, Indiana, Kansas, New Mexico and Tennessee. It’s all part of Obama’s mission to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities, according to the USDA. How exactly fast-speed internet service will help accomplish this is not explained by the agency.
Perhaps not coincidentally, the Human Rights Council of the United Nations General Assembly recently determined that, like healthcare, shelter and food, broadband access is a basic human right that allows people to “exercise their right to freedom of opinion and expression.” In a lengthy report addressing obstacles that challenge the right of all individuals to receive information through the internet, the U.N. demands that governments worldwide make the internet “widely available, accessible and affordable to all segments of the population.”
Here is the reasoning: “Given that the internet has become an indispensable tool for realizing a range of human rights, combating inequality and accelerating development and human progress, ensuring universal access to the internet should be a priority for all states,” the famously corrupt world body says in its report. The U.N. also demands that governments offer special “internet literacy skills” training to help the underserved with computer skills. This could very well be the Obama Administration’s next publicly-funded project.
In an example of how government at every level wastes tax dollars, one U.S. county is spending around $4 million in combined federal and local funds to house a dozen homeless people in an affluent community.That translates into more than $330,000 per person, which means that Uncle Sam might as well buy them each their own, fully furnished house. After all, the median single-family home in the U.S. costs around $172,000 so the government could also throw in a few years worth of utility bills and even groceries.Instead officials in Bethesda Maryland will spend the money to operate a three-story apartment building, operated by the Montgomery County Housing Opportunities Commission, that will house 12 homeless adults. The facility will have six studio and six one-bedroom apartments as well as a gym and computer center, according to the local newspaper (Washington Examiner) that exposed the costly project this week.A chunk of the money—$1 million—will come from President Obama’s fraud-infested stimulus, which has proven to be a disastrous waste of public funds. Judicial Watch has reported on the many scandals involving the president’s $787 billion plan to jumpstart the economy and put Americans back to work. Much of the money has gone to companies that have cheated the government out of hundreds of millions of dollars in taxes and a series of wasteful projects.Last summer a scathing U.S. Senate report revealed that tens of millions of stimulus dollars went to frivolous projects like international ant research, to study why monkeys react negatively to inequity and a “tunnel to nowhere” in Pennsylvania. The same probe discovered that recovery funds also bought state-of-the-art cell phones for low-income smokers trying to quit, fancy digital music players for high school students in one state and advertising to promote the stimulus.What’s another million so homeless folks can live in an upscale neighborhood? Besides the stimulus cash, Montgomery County’s new homeless digs are being financed by an additional $944,829 in county housing funds and $2.1 million in state low-income housing tax credits.