Federal debt is nearing $33 trillion. The 2023 Biden spend-a-thon has the 2023 federal deficit approaching $1.7 trillion. And the government is facing a shutdown at the end of the month, as conservative Republicans push for more spending cuts, even as President Biden is asking for billions of dollars in additional disaster assistance and support for Ukraine. But here’s the thing: Had the government been more judicious in its multitrillion-dollar handout for pandemic relief, we would be in a better place.
How much better? Perhaps $400 billion better, maybe more.
The Associated Press reported last June, “An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent. Combined, the loss represents 10% of the $4.2 trillion the U.S. government has so far disbursed in COVID relief aid.”
To break that down a little, the Small Business Administration (SBA) has estimated that some $200 billion may have been fraudulently claimed from small businesses under pandemic programs such as COVID-19 Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP).
And a recent Government Accountability Office (GAO) report finds fraud in the Covid-19 unemployment insurance programs was “likely between $100 billion and $135 billion.”
Combining the SBA’s and GAO’s estimates, we’re looking at perhaps $300 billion to $335 billion—so far. So, it appears the AP’s estimate of some $400 billion may be spot on.
But the news isn’t all bad. The SBA says the “OIG [Office of Inspector General] collaboration with SBA, the U.S. Secret Service, other federal agencies, and financial institutions has resulted in nearly $30 billion in COVID-19 EIDL and PPP funds being seized or returned to SBA.”
And Attorney General Merrick Garland claims, “The Justice Department has now seized over $1.4 billion in COVID-19 relief funds that criminals had stolen and charged over 3,000 defendants with crimes in federal districts across the country.”
I guess Garland thinks we should be impressed with reclaiming $1.4 billion out of hundreds of billions of taxpayer dollars fraudulently taken, but most people would consider that miniscule.
Had the government managed the various Covid-19 relief packages better—something it wasn’t interested in doing since the goal was speed, not efficiency—federal debt and the current federal deficit would be lower. Not a lot lower, to be sure, but lower nonetheless, perhaps making it a little easier to reach a government-funding agreement.
Spending blowouts and financial mismanagement have consequences—especially when some finally say enough is enough. And one of those consequences may be a government shutdown.
September 19, 2023