Good Enough for Government Work
Obamacare’s failing website has dominated the news since its catastrophic launch more than two months ago, at least until the administration’s declaration on Sunday that it is finally “fixed.” It’s not, of course. The site still only works for 80 percent of users and apparently it is full of security problems.
Healthcare.gov became such a focal point not just because its function was crucial to the law, and not just because it was preventing millions of people from signing up for the policies they’re being forced to buy. It stuck as an issue because it became the perfect symbol of why this whole scheme is bound to fail. The President and Democrats in Congress told us they could re-engineer the country’s health system from bureaucracies in Washington. It turned out they couldn’t even engineer a website.
Unpleasant surprise after unpleasant surprise about Obamacare and its online home must leave even the most committed proponents of big government bureaucracy questioning the absurd system they’ve constructed.
President Obama himself attributed the failure to the government’s thicket of rules, observing in a recent press conference that he couldn’t be expected to replicate his campaign’s technical achievements within the government because, he said, “If you're doing it at the federal government level, you know, you're going through, you know, 40 pages of specs and this and that and the other, and there are all kinds of laws involved. And it makes it more difficult. It's part of the reason why chronically federal I.T. programs are over budget, behind schedule...”
He’s right about the website. But it makes you wonder why he would want to do that to health care, too.
By any standard but the bureaucracy’s, a website that functions 80 percent of the time is a failure. But for the 130-year-old civil service system, the Obamacare website is practically a success. Compared with the complete breakdown we see in many parts of the government, this is nothing.
Consider, for instance, the amount of outright theft of taxpayer money that the federal government tolerates year after year.
My former colleague, Jim Frogue wrote a book at the Center for Health Transformation about the grand scale of fraud in Medicare and Medicaid. He found that these two programs pay between $70 and $120 billion annually to thieves. That’s as much as $376 every year for every person in the United States. The book was called Stop Paying the Crooks; the CMS bureaucracy evidently finds it impossible to do.
Disability roles have shot up in recent years, and certainly many of those new recipients are legitimately disabled. But it’s also clear that a substantial number are defrauding taxpayers with the tacit permission of the bureaucracy in a program that now costs more than food stamps and welfare combined.
An analysis of federal survey data by the Washington Examiner found recently that “recipients of federal disability checks often admit that they are capable of working but cannot or will not find a job, that those closest to them tell them they should be working, and that working to get off the disability rolls is not among their goals.”
In my new book Breakout, I tell the story of a “disabled” veteran whose business was receiving priority on federal contracts because of his “service-related injury”--twisting his ankle in a high school football game.
Tolerance of fraud and theft is not limited to the entitlement bureaucracy, however. The Department of Defense awarded nearly $400 billion between 2000 and 2010 to contractors that had reached settlements or judgements of more than $1 million in cases brought for defrauding the government, according to a report prepared by the Pentagon for Senator Bernie Sanders. (That’s just the value of the contracts the Defense Department willingly awarded to the companies after fraud cases were settled.) Over ten years, the report found, at least $255 million “went to 54 contractors convicted of hard-core criminal fraud.”
There is probably no way to get an accurate picture of just how much the Pentagon pays to thieves each year, since the Department is incapable of keeping track of its own funds and assets. A recent Reuters investigation revealed how the military’s accounting practices involve routinely fudging whatever numbers are required to make the books balance--behavior that in the private sector would be considered fraudulent. This included nearly $10 billion worth of “plugs” last year alone.
The reason, Reuters reports, is simple bureaucratic incompetence--the Pentagon’s “continuing reliance on a tangle of thousands of disparate, obsolete, largely incompatible accounting and business-management systems. Many of these systems were built in the 1970s and use outmoded computer languages such as COBOL on old mainframes. They use antiquated file systems that make it difficult or impossible to search for data. Much of their data is corrupted and erroneous.” Who can say how much theft these systems hide?
Another gigantic bureaucracy, the IRS, last year gave more than a million tax refunds worth nearly $4 billion to identity thieves. According to a report on the Inspector General’s findings, these included “a total of 655 tax refunds to a single address in Lithuania, and 343 refunds went to a lone address in Shanghai.”
“Among individual homes,” it continued, “one address in Orlando received 580 tax refunds totaling $870,000 last year...Another Orlando address received 291 refunds totaling $466,000.”
The IRS’s inability to flag even these obviously fraudulent claims brings us back to Obamacare, since the agency will distribute the subsidies for individuals to purchase insurance in the form of tax refunds.
As the AP reported this week, a Treasury inspector general warns that "the IRS' existing fraud detection system may not be capable of identifying (Affordable Care Act) refund fraud or schemes prior to the issuance of tax return refunds.” The website really is just the beginning.
How does the IRS Commissioner respond to the concern? "We have a proven track record of safely and securely transmitting federal tax information,” he said, “and we have a robust and secure process in place to deliver this important credit for taxpayers." Taxpayers, yes, and to Lithuanian crooks, too.
A full tally of all the money the federal bureaucracy loses to fraud and theft is probably impossible to obtain, for the same reason the system is losing it in the first place: the whole bureaucratic model is so outdated, complex, and dysfunctional that no one in Washington has any idea where all the money is ultimately going. And as long as it keeps flowing in, they’re not particularly concerned.
Your Friend,
Newt