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A Festivus Airing of Grievances for Government Waste

Sunday December 27th, 2015   •   Posted by Craig Eyermann at 10:48am PST   •  

Festivus-2015-waste-report We missed it before the Christmas holiday, but December 23 marked the annual celebration of Festivus, which if you’re fan of the old Seinfeld TV show or its reruns, you’ll recognize as the focal point of one of the show’s more memorable episodes.

As fans of the show know, one of the core activities of Festivus is the “Airing of Grievances”, and it was in that spirit that Senator Rand Paul (R-KY), who in addition to currently being one of the many candidates running for President, also chairs the Federal Spending Oversight Committee. As part of his work for that committee, his office has produced a Festivus’ themed Waste Report for 2015, which collects some 33 really wasteful ways that the U.S. federal government spent over one billion dollars in 2015.

We thought it might be interesting to consider just the three most costly line items on the list, which account for over 70% of the $1 billion that Paul argues was wasted, starting with the costliest.

Insurance payments to farmers whose farms were established in areas that cannot reliably grow crops.

Insurance protects against the rare and unforeseen, not the regular and predictable.
You insure your car against accident, not oil change.

But, when the government is the insurer, this kind of obvious logic does not apply. Surprisingly (or maybe not), the Department of Agriculture (USDA)is paying out approximately $370 million annually in “prevented planting” crop insurance to farmers who cannot plant their crops in SEASONAL WETLANDS.

At issue is the intersection of the “prevented planting” crop insurance and prairie potholes. What are prairie potholes? They are basically ground depressions that fill with water in the rainy spring and dry out in the summer and fall, and are mostly located in the upper-Midwest. The “prevented planting” program is taxpayer subsidized crop insurance that compensates farmers when extreme weather prevents planting.

The problem is, some farmers claim prevented planting each year for the regular flooding of prairie potholes.

In fact, farmers in sixty-five counties, mostly in the Dakotas, have gotten payouts, 14 years in a row, and in another twenty-nine counties have gotten payments 13 of the last 14 years. In most cases, insurance payments were greater what direct crop subsidies would have been.

No private insurer would stand for this and would either not offer insurance or would control for this kind of abuse. To their credit, the USDA is not complacent in this abuse. Several attempts have been made to close the prairie pothole loophole. As recently as last year, USDA “clarified” rules to effectively prohibit claims four years in a row. But data suggests this new policy could be gamed. At the heart of the problem is that USDA simply does not have a definition of “Normal” weather.

So, if we know it is sure to happen, why are we insuring against it?

Why indeed? We can speculate that the program’s administrators were sleeping on the job, which perhaps explains the second most costly line item of waste captured in 2015’s airing of grievances.

Failed to prevent substantial Medicare overpayments for sleep studies.

You have probably heard of sleep apnea, the condition where a person momentarily stops breathing during sleep. In fact, Medicare alone spends almost $300 million a year on sleep studies to determine if patients have this condition. Unfortunately, it seems Medicare has a problem with overpaying for these important studies, costing taxpayers as much as $175 million a year.

In a recent report, the Inspector General for the Department of Health and Human Services noted that one provider of sleep studies recently agreed to repay $15.3 million resulting from false claims.

The IG report delved into another sleep study provider from Orlando that was estimated to have been overpaid more than $1 million, or almost 60 percent of all payments they received.

Specifically, the IG found, that in a sample of 100 patients, 74 percent of items billed were not allowable under Medicare guidelines. In addition, nearly one-third of those payments were made without supporting documentation, such as a doctor’s referral. And, in one instance, Medicare paid for a procedure that was not even done.

Shockingly, roughly 60 percent of payments made to this particular provider were over 3-years old. Which means Medicare paid the bill for services without the required documentation and never followed up again.

This never would have been noticed if it were not for the Inspector General. If this is the trend, then the government could be improperly paying as much as $175 million a year just on sleep studies.

It’s one thing to not have adequate control over spending money the way it is supposed to be spent, but what in the world accounts for spending money that has been clearly allocated for a specific purpose and then okaying it to be spent on something entirely different? One might argue that situation indicates a complete breakdown of control over spending, and for the third most costly line item in the 2015 airing of wasteful government spending grievances, it’s something that’s hurts children.

Allowing School Lunch Program funds to be used for lawn sprinklers adnd other purposes.

According to the California Senate Office of Oversight and Outcomes (CSOOO), over at least a six year period, the Los Angeles Unified School District (LAUSD) diverted more than $158 million of federal School Lunch Program funding to other uses including buying lawn sprinklers and paying the salaries at the district’s television station.

One tactic used was to reduce lunch periods to as little as 20 minutes in some schools, so students (whose lunch was already paid for with federal funds) would be unable to receive food.

It’s probably not much of a surprise that the administrators of Los Angeles’ school district would put their own interests ahead of the children enrolled in the schools they run. What is a surprise is that during a time of increasingly severe drought in the state, which prompted California State Governor Jerry Brown to impose strict water conservation measures statewide after entering its fourth year, they chose to prioritize having green lawns over providing meals to the district’s poorest students.

It’s certainly not something that you’ll ever find discussed on the district’s television station, which aspires to compete with Los Angeles’ public television station in the near future.

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December 2015