The Feds Wasted $186 Billion on ‘Improper Payments’ Last Year

Trillions of taxpayer dollars flow through the federal government every year, and a lot of them don’t end up where they are supposed to go.

During the 2025 fiscal year, the federal government lost an estimated $186 billion to “improper payments,” according to a new report from the Government Accountability Office (GAO). Most often, those improper payments are the result of errors that resulted in the government “paying someone who was ineligible for federal assistance,” the GAO reports. Since the office started tracking improper payments in 2003, those mistakes have cost taxpayers more than $3 trillion.

“Given the magnitude of these estimates, it is imperative that agencies prioritize reducing improper payments,” the GAO wrote in a letter to Congress that accompanied the report.

That doesn’t really seem to be happening. As the GAO notes, there are 13 programs across seven federal agencies that have reported improper payment rates of 10 percent or higher in two consecutive years. Six of those programs have had improper payment rates over 10 percent for at least four consecutive years.

That’s a time period that crosses parts of both the Trump and Biden administrations, during which those programs have, essentially, wasted at least $1 out of every $10 the taxpayers have provided.

The two major federal healthcare programs were responsible for the largest shares of improper payments last year. Medicare, the federal program that covers healthcare costs for the elderly, had $57 billion in improper payments, according to the GAO. Medicaid, the joint federal-state program for the poor, accounted for about $37 billion in improper payments. Together, that was about 51 percent of all improper payments across the federal government last year.

However, the $186 billion figure tallied up by the GAO is almost certainly a low-ball estimate, because not every part of the federal government is required to report its estimated improper payments.

For example, the Department of Health and Human Services (HHS) does not report improper payments made through Temporary Assistance for Needy Families (TANF), the federal government’s main welfare program for the needy. As the GAO explains, those figures aren’t reported because TANF spending is handled by the states—federal dollars are delivered in the form of block grants to state governments, where they supplement state-level welfare spending—and HHS lacks the necessary authority to request the data on improper payments.

Congress could change that anytime it wants, and the GAO has asked lawmakers to do that. They have not.

The GAO estimates that the total amount of improper payments increased by about $24 billion in 2025 over 2024. That’s despite the Trump administration’s widely publicized effort at cracking down on waste and fraud via the Department of Government Efficiency (DOGE). That means DOGE ultimately failed to reduce the total amount of money the government spent and failed to reduce wasteful spending in the form of improper payments.

In large part, that’s because DOGE failed to look in the right places—the places that entities like the GAO have been highlighting for years in reports like the one released this week.

Improper payments have been, as the GAO reports, a “long-standing, significant problem” in the federal government. Probably the most direct way to solve it is to have the government simply spend less money on everything.