BREAKING NEWS: DOGE Fraud Committee Meeting

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So that's the deal. I make better content every time and all I ask is for a subscriber real quick. All right, thanks. Beyond government operations will come to order and I want to welcome everyone to this, what I think is going to be an important bipartisan hearing today. Without objection, the Chair made a clear recess at any time and I recognize myself for making an opening statement to our witnesses that are here today into the people who have taken time to come here to see

today, as well as my colleagues. I want to really dispense with my opening statement and without objection, I'll enter that into the record. But what I'd like to say is, is that this is a follow up to the meetings which we have held for the last few years, where there was active discussion, not just about what we were going to do to recognize what might be considered waste, fraud or abuse.

Or money that was spent by the federal government that did not equal that which it was intended to do, which kept money away from the real recipients. And for people who would have benefited with congressional intent. As you will recall, last year we held what was a meeting in October whereby we had GAO and others who came to speak with us and they came up with a what might be a three-year number of their ideas about inappropriate payments than waste, fraud and

abuse. But things that were paid that we felt like we're not permissible or following the intent of the law or the needs of the money. Mr. Mfume and I at that time looked at each other and said we are going to work together. We are going to challenge GAO to come back to us. We are going to find within the government other particular people who have talent, data, information and can lead us to a better solution.

I'm pleased to say, Mr. Infume, I believe this is the beginning of that, turning the corner to where we will then not just work together but try and discover the things that reside within the government to gain the information is necessary. And I think today's hearing will prove that in. So I'm delighted that you were here. I'm going to put my opening statement on the record, but

that is what I want to say. This is about identifying, preventing fraud, improper payments in federal programs. And we're going to learn today how we're better prepared if we work together, if we find a way. And I think we will not just work together, but to use the important elements of this government for data, information and lessons learned. And I would say thank you for being here. Distinguished gentlemen wish to have time for an opening statement. I do Gentleman's recognized.

I do. Mr. Chairman, thank you very much. Good morning to you. Good morning to our witnesses who are here. And I want to just personally thank Chairman Sessions for the manner in which we continue to meet each other halfway, even though we're on different sides of the aisle, to come together to find a way at least to release the federal government of some of his ailments, particularly this whole notion of improper payments, waste, fraud and abuse.

We did that throughout the 118th Congress and my colleagues and I on this subcommittee all remain laser focused on combating those matters. And I think we also have always agreed that this is a non partisan matter. No matter where we are in our country or philosophically, we agree that every dollar directed to every program ought to go to

the intended purpose. From the very beginning of this President's term, the so-called Department of Government Efficiency, and some of you know that I have referred to it as the Department of Government evil for my own particular purposes because of the way it's affected working men and working women and their families across this country. I think hard working, dedicated men and women exist in every Congressional District throughout the country.

And while there is still no full complete public accounting on all of them who have been dismissed, other than numbers, we don't know the names and the faces and the families, the children and the mortgages and everything else. It's been disrupted by this. I've got no doubt that among the hundreds of thousands of federal employees affected by the fork in the road e-mail and the mass firings and a probationary staff, that many, many are experienced in the pain that we

do not feel right now. And that's not to even mention, as I'm sure the chairman would mention also, the 18 inspector general's that have been dismissed. They were like the sheriff's that were running the town and doing a damn good job at it and reporting back to this committee and both the chairman, Sessions and myself on real clear ways of trying to move us forward deliberately and focused.

And I commend their work. I look forward hopefully to the return of some of them, and I know that their role cannot be understated. We're already in a situation where 10 of 24 agencies subject to the Payment Integrity Information Act we're not fully compliant with improper payment reporting requirements as of 2022. It is the furthest thing from common sense, in my opinion, to fire the inspector generals who have a real set of experience and a body of experience addressing this problem.

As witnesses have discussed in many of our previous hearings on this issue, particularly last September, combating fraud, improper payments abuse is not as simple as waving a magic wand or a chainsaw. Real progress relies on access to quality data. It means thoughtful partnership with agency leaders, and it means investments into the technology and the staff needed to create proper internal controls to prevent improper payments and fraud.

I was proud to join with many of my colleagues on the Oversight Committee and introducing recently the Taxpayer Funds Oversight and Accountability Act, which in many respects would make important strides in adjusting these challenges. Simply put, I think we have a real challenge before us, not to mention the fact that sometimes we're not focusing on some of

the real issues. I would call everyone's attention to the fact that the largest agency and with the largest budget is still the Pentagon and we have witnessed seven straight audits that have failed because of problems at the Pentagon. I don't know how you can fail seven straight audits and not become the focus of waste, fraud and abuse. That's another story, perhaps for another time, but it is something that continues to cry

out for very real attention. The GAO reported recently a total of 162 billion in improper payments and government wide matters in fiscal 24 and that marks a significant reduction. It's almost embarrassing to say that that's a significant reduction from the 236 billion in improper payments in fiscal 2023. In recognition of the shared challenge, Chairman Sessions and I, on a bipartisan way, work to discover real pathways to reducing fraud and to reducing

improper payments. This past October, both he and I sent a joint letter to the GAO requesting that they review, as was mentioned earlier, $2.7 trillion and improper payments and fraud that have occurred since 2003 and provide actionable recommendations before this committee. So, as I conclude, I must mention the importance of staying grounded in the scope and the breadth and the depth of

this problem. While improper payments and some fraud exists, that does not mean that the bedrock of social safety net programs like Medicaid, Medicare, and Social Security should be cut or privatized. The existence of these problems does not justify in any way mass firings of workers, failures to pay nonprofit organizations.

It does not justify the fact that the government owes for work done in so many instances and that the effort really is moving to destroy many of the federal agencies as we come to know them. Even despite the claims that Social Security is rife with fraud and fraudulent payments due to quote, long dead individuals who are about 133 years of age, that program has a payment accuracy rate of over

90%. And that's according to the Center for Budget Priorities. So as we move forward, as together, hopefully with our own differences of opinion, but in an effort to move forward together to combat waste, fraud and abuse as we know it and as we are defining it. I hope that we as a Congress will remember that the purpose of this weighty task is not to exploit these problems or to destroy the federal government in the process, but to work for

a better country. And to do that, as the chairman has said, hand in hand, working together despite our differences, to come up with a consensus. That's what we really want, consensus approaches that are not on the extreme left or the extreme right, but in the middle where most people are and in the middle where the problems are, so that we can deal with this issue in a very responsible sort

of way. And to be able to report back to the American people that we really have made an impact in dealing with the issues of waste, fraud, and abuse. Again, I cannot say enough about the Chairman Sessions work in this regard. In this committee's work, we didn't get a lot of attention, but we were in the forefront for the last two or three years. So it's good to know now that people are paying attention. We just have to make sure that we are doing this the right way and in a way that is

responsible. Thank you, Mr. Chairman, and I would yield back. I appreciate the gentleman's dialogue. I want to say that maybe 10% or more, I think more of the American people want, expect and need us to work together. And you have my promise that it will continue to be done and we will work together. I you have a strong voice, you have a strong idea of what you're after. But what we're dealing with here is something that must be overtaken.

We have to win on this. And it will be a bipartisan effort. And I think the two with the three witnesses that we have today are shining examples that can lead the way, not the partisanship, but the answers. And I think that's what we seek. I want to thank your conversation today. And I think that we'll see that also. Sir, thank you. I want to request unanimous consent that the gentleman, Mr. Moskowitz from Florida, be waived on today's hearing for

the purpose of asking questions. That objection, so ordered. OK. We're now going to get to the big deal and the big deal is our witnesses who takes seriously not only that effort that you and I in this subcommittee share, but also ideas and answers for leading us to that. I'd first like to introduce Kristen Cokie Leak serves as the managing director, financial management assurance team at the

GAO. In her role, she overseas issues involving accountability, professionalism, auditing standards and DoD financial management and improper payments. Please know that you are being heard as well as your party when there are conversations about DoD. Next we have Mr. Dieffenbach.

Ken was appointed to the Pandemic Response Accountability Committee in June of 2024. He brings over 28 years of experience in the oversight community and served in various roles related to investigation and data analytics. We also have Jennifer Wagner. She joined the Center for Budget and Policy Priorities in 2015. She focuses primarily on Medicaid eligibility and enrollment issues, which certainly highlights some of the discussions that the American

people want us to delve into. I'm delighted that all three of these witnesses here. I would now ask that all the witnesses rise pursuant to Committee Rule 9. G. The witnesses will stand as required. Raise their right hand. Do you solemnly swear or affirm that the testimony they're about to give is the truth, the whole truth, and nothing but the truth. Truth so help you God if the the workers show that the witnesses answered in the affirmative.

Thank you very much. You may now take a seat. I tried to keep my comments short. The stream fume did same, but we speak from one voice. We are both delighted that you're here today. So let me remind the witnesses that we have your written statements and I would encourage each of the the staff and the members who are here to look through this if they have not up to now, data and information about actual data and actual solutions is what today's hearing is going to be about.

So I want to first make sure that we go right to this. I'll let everybody turn to their information that they've got there. Mr. Miss Key Co Key leak. I didn't get it right yesterday and I'm not going to get it right today. Please correct me. Co select. Co select a bill had me say Co select five times yesterday. That was not today. We're delighted that you're here. Please know this that we traditionally will follow the five minute rule as we always have.

But I think that as we go through there, if you want to finish questions or or the statements you want to make. But as we get into questioning, I'm very interested in both sides, the members and our our witnesses getting to where they want to get. And without a further discussion, we will recognize Miss Coakley. Thank you. Good morning, Chairman Sessions, Ranking Member and Fume, and members of the subcommittee.

Thank you for the opportunity to be here today to discuss the long standing and pervasive issue of improper payments and fraud in the federal government. Whether it involves an established program or one created to respond to an emergency, improper payments and fraud erode the public trust in government and result in hundreds of billions of dollars lost. Improper payments and fraud are two distinct concepts. They're related, but not

interchangeable. Simply put, improper payments are payment errors, payments that should not have been made, or payments that were made in the incorrect amount. These could be overpayments, underpayments, or payments to ineligible recipients. Fraud involves obtaining something of value through willful misrepresentation. Individuals or organizations deliberately lying to defraud

the federal government. While all fraudulent payments are considered improper, not all improper payments are considered fraud. That's right. Since 2003, federal agencies have made an estimated $2.8 trillion in improper payments, including an estimated $162 billion in fiscal year 2024. Since these year to year estimates are based on a subset of government programs, 68 programs in 2024, the actual improper payments amount may be

significantly higher. Last April, we estimated that based on data from fiscal years 2018 to 2022, the federal government annually lost between 233 and $531 billion or about 3 to 7% of federal spending to fraud. Our fraud estimate includes all federal programs and the wide range reflects the different risk environments during the five year period, including normal operations and COVID-19 relief programs and spending. Fraud at this level indicates the importance of fraud risk management.

However, most government spending is not fraudulent. While my written statement more fully covers GA as wide body of work in these areas, I will focus this morning on how agencies and the Congress can work to better prevent improper payments and fraud. The best way to reduce improper or fraudulent payments is to not make them. Preventive controls, as their name implies, are meant to stop improper and fraudulent payments before they occur.

One key government wide preventive control is the use of Treasury's Do Not Pay system. Do Not pay consolidate much of the data matching agencies have done individually to flag potentially improper or fraudulent payments. Federal agencies and some state programs can and should leverage Do Not Pay to ensure program integrity. Another important action agencies can take is to assign assign responsibility for tackling improper payments and

fraud to senior level officials. This helps establish accountability and endows those officials with the authority to lead and make change. In our March 2022 testimony before the Senate Committee on Homeland Security and Governmental Affairs. We recommended 10 actions that Congress could take to increase accountability over improper proper payments and fraud across the federal government. As of today, these recommendations to Congress

remain unaddressed. To improve transparency and accountability over fraud management, we recommended that Congress reinstate the requirement that agencies report on their anti fraud controls and fraud risk management efforts in their annual financial reports. And to better prepare for future emergencies such as hurricanes, wildfires, or pandemics.

We recommended that Congress require OMB to provide guidance for agencies to proactively develop internal control plans that will be ready for use in future crises and require agencies to report these plans to OMB and Congress.

Finally, to facilitate data access and data sharing, which is key to effective prevention, we recommended that Congress consider amending the Social Security Act to explicitly allow the Social Security Administration to share its full death data with Treasury's Do Not Pay system. In December 2020, Congress passed legislation requiring the Social Security Administration to share its full death data with Treasury's Do Not Pay system for a three-year pilot

period. This requirement is set to expire in December 2026, and we think Congress should make it permanent. Earlier this year, Treasury reported that data sharing during the pilot had led to $31 million in improper payments prevented and recovered over its first five months, and the pilots projected net benefit is over $215 million for the full three years.

Congress can make an immediate impact by ensuring the Do Not Pay system continues to have access to the Social Security Administration's full death data. Continued congressional oversight is critical to ensuring that agencies address improper payments and fraud in their programs. Along with the actions detailed in my written statement, Congress can use a variety of tools such as hearings and the appropriations, authorization and oversight processes to incentivize agencies to improve

program integrity. This concludes my opening statement and I will be happy to answer questions. Thank you very much, the distinguished gentleman. Mr. Deffenbaugh, you're recognized. Thank you, Chair Sessions, Ranking Member and fume members of the subcommittee. It is an honor to be here today to talk about the critically important topic of preventing

fraud in federal programs. This subcommittee has been at the forefront of bipartisan efforts to find solutions to reduce fraud and other types of improper payments. Today's hearing comes at a critical time because unless Congress takes action, one of the most significant tools it has created to improve program integrity will be lost.

As the executive director of the Pandemic Response Accountability Committee, or PRAC, an entity Congress created almost five years ago to oversee $5 trillion in relief funding, I can point to untold examples where fraudsters stole hundreds of billions of dollars from taxpayers and the intended

beneficiaries of these programs. As a federal law enforcement officer who has spent over 28 years bringing to justice fraudsters who stole from federal programs, I know first hand that unless we invest in cross agency prevention and enhance data sharing, we will continue to be victimized by increasingly sophisticated and well resourced bad actors. Pay and Chase is not the solution, Prevention is. To be clear, agencies have the primary responsibility to

prevent fraud. But the PRAC in the OA GS also play an important role. Since its formation in 2020, the PRAC has time and again alerted federal agencies, Congress, and the American public to the lessons learned from the pandemic and our recommendations to help strengthen federal programs. For example, we issued a fraud alert on the use of suspicious Social Security numbers in obtaining over $5.4 billion in SBA relief programs.

We've not only identified potential fraud, but we're also actively working to recover stolen funds. We are partnering with 48 federal law enforcement agencies to support over 1000 investigations related to over $2.4 billion in potential losses. As we will discuss today, the time to prepare for the next disaster is now, not when new funds start flowing. We must act on these lessons learned.

For example, we must address obvious anomalies such as Social Security numbers that have never been issued or were issued to people who are now deceased, dates of birth indicating an applicant is 10 or 110 years old, applicants who have already applied in five other states, or applicants who use names like Charlie Chaplin, Abraham Lincoln, or Foghorn Leghorn, as at least three people did in pandemic programs. Those three were stopped before the money was dispersed.

Let me assure you, the government must pause and more closely review suspect claims before money is dispersed. We must look across multiple programs for red flags, as fraudsters do not follow our government organizational charts. They steal from wherever it is easiest to steal. We must also responsibly leverage more data, especially data already in the possession of the government, to identify suspicious patterns and trends

indicative of fraud schemes. Today, the PRAC has the capacity, infrastructure, relationships and talent to conduct pre award vetting and the more complex network and trend analysis. We know from our work that fraudsters can apply to all 50 States and territories from behind one keyboard. They can hit multiple federal programs using the same false information. They can outsource these tasks to artificial intelligence and

bots. But the PRAC is scheduled to sunset in September of 2025, and we're only two months away from having to begin deleting our data that we have collected and curated over the last five years. This includes over 60 major data sources and some 1.7 billion data points. We're also concerned about losing more of our staff whose outstanding analytical expertise

is in great demand. We will soon reach the point of no return, in which rebuilding this capacity would take several months, if not years, and a significant new investment of taxpayer dollars. the US General Accountability Office has expressed strong support for the PRAC. An estimated their analytics capability could result in an annual financial benefit of a billion dollars or more a year if the PRAC ceases operations in September.

The next time the government responds to a natural disaster and economic crisis, or another event where we are quickly dispersing benefits to people in need, fraudsters will again swoop in and steal. We will then inevitably ask ourselves, how did we lose so much money to fraud? If this happens, it will be because we chose not to be prepared, and we chose not to invest in fraud prevention and

increase data sharing. Instead, we should continue the investment that Congress has made to the prac in the PRAC which is proven, which has a proven track record and a demonstrated return on investment. American taxpayers deserve nothing less. I look forward to your questions. Thank you very much for the audience that may be watching, that is the Pandemic Response Accountability Committee that was referred to as PRAC. Thank you very much, Miss Wagner. You're now recognized.

Chairman Sessions, Ranking Member and FUME, and members of the Government Operations Subcommittee, I am honored to be here today to discuss something I've spent over 20 years working on, improving government systems to get the right benefits to eligible people in a streamlined and accurate way. I started my career as a food stamp caseworker in North Carolina and then worked for the Illinois Department of Human

Services before joining CBPP. I'm going to focus today on Medicaid and SNAP, specifically on three key points. First, Medicaid and SNAP have a rigorous eligibility verification process, and the vast majority of people are eligible for the benefits they receive. Mistakes are made, but most improper payments are paperwork issues, not fraud. Second, running an accurate program means making sure eligible people can get and keep

benefits. When we talk about program integrity and accuracy, we need to talk about how adding red tape can harm eligible families. And 3rd, there are effective ways to reduce improper payments and improve program integrity, but some of the solutions proposed don't match the problems. They don't solve improper payments and will increase errors. Let's dig in. First, nearly all of the people enrolled in SNAP and Medicaid are eligible for their benefits.

Applicants fill out complex forms with details about their household expenses and income. Agencies verify that information against federal, state, and commercial databases. If the application and database don't match, the applicant must send verification like a pay stub. Improper payments are not the same as fraud and are primarily

caused by paperwork errors. For example, a Medicaid worker might check a database to verify an applicant's eligibility, but not capture and retain the data viewed in that moment. When a reviewer comes and looks at that case months later, they can't confirm the case is correct because they can't see what the worker looked at when the case was improved was

approved. There's no indication that the applicant isn't eligible, but since the paperwork is missing, it's considered an improper payment. This is a technical problem, not a fraud problem. Second, it is important to acknowledge 1 shortcoming of improper payment measures. They only consider those who receive benefits. They don't consider those who are eligible but couldn't enroll due to confusing notices or

agency mistakes. We must keep this in mind when in when evaluating solutions to improper payments. Which brings me to the my Third Point. Many proposed solutions don't match the problems and won't reduce improper payments or improve accuracy. For example, requiring Medicaid renewals every six months instead of every year will cause more problems than it solves.

More paperwork will lead eligible enrollees to miss out on benefits for procedural reasons, not because they don't qualify for the program, but because they don't receive or return a notice or the agency doesn't process that paperwork timely. And more work for already overwhelmed state staff will lead to more mistakes and more improper payments. So what would work?

The Government Accountability Office identified 2 strategies that have been successful in reducing improper payments, establishing accountability and facilitating internal collaboration, and providing technology tools and training

targeted to root causes. Federal agencies overseeing SNAP and Medicaid need sufficient staff in key roles to make this happen, such as Inspectors General to audit eligibility determinations and staff to provide technical assistance and hold states accountable for fixing the issues that are discovered in audits. We saw this approach work.

Federal agencies recently helped states better implement the requirement to conduct ex parte renewals, which happened when data sources confirm ongoing eligibility and enrollees don't have to fill out complex paperwork to renew. The United States Digital Services worked with States and more than 5 million people were renewed for coverage with less

red tape last year. Another solution is the Medicaid Eligibility Enrollment Rule, finalized in April of 2024, which updates outdated regulations on case record maintenance and will substantially reduce the frequency of improper payments resulting from inadequate records. It's not an easy task to address improper payments in large programs serving millions of

people. Proposals that suggest billions of dollars can easily be saved don't address improper payments and would result in cutting eligible people off from vital help. But embracing solutions that match the actual problems can bring us closer to the goal of getting the right benefits to eligible people in a streamlined and accurate way. Thank you for the opportunity to testify and I look forward to your questions.

Thank you very much Mr. Fume. You heard me say that I felt like our witnesses all were not only vital to our decision making, but have appeared in a way to give us answers to these problems. Thank you very much. Want to thank each of our witnesses. I'm first going to go to the distinguished gentlewoman from North Carolina, Chairwoman Virginia Fox. Gentleman's recognized. Thank you, Mr. Chairman, and I thank our witnesses for being here today.

Miss Kosilek. The Payment Integrity Information Act codified the Do Not Pay Initiative, which provides agencies with access to certain databases that can assist in preventing improper payments and requires a review of the available databases prior to the release of funds. Despite this requirement, it is unclear that agencies are

utilizing the Do Not Pay system. For example, the Department of Transportation Inspector General reported in November 2023 that the agency did not use the Do Not Pay portal in prepayment processes as the law requires. In your opinion, why do agencies not use all the tools at their disposal to prevent improper payments? And do you believe that there are ways to improve the Do Not Pay system? Thank you. Yes, I think there are ways to

improve the do not pay system. As I mentioned, making sure that full death master file is in there and that all relevant data sources are in there is is key to making sure that that source of information is as complete and reliable as it can be. A way that you to encourage agencies to use it is really to think about how you would do reporting. I think right now agencies kind of report on the back end of what went wrong. Thinking about how you would have agencies report about preventing.

So for instance, the Do Not Pay system and Treasury payment integrity tools can flag payments that potentially would have indicators that they may be improper. However, as noted, it really is up to the agencies to make decisions about whether a payment will be made. You could consider having agencies report on when those flags are not upheld. For example, if something is flagged and do not pay, but a payment is made anyway.

Having agencies track that, identify that, and report back when that is happening would help folks determine if there there are instances where the payment should go ahead anyway, or if truly that payment should have been stopped. Let me follow up with another question for you and Mr. Dieffenbach. Once an improper payment is made, what can an agency do to recover the payment and how much does it cost in human hours and dollars to recoup an improper payment? First, you Miss Kosilek.

Sure. There are requirements for agencies to attempt to recover improper payments and I believe it's up to the agencies to determine when it's cost beneficial to do so. So there it can be instances where an agency may determine it is not cost beneficial to pursue all avenues in recovering that you would hope that agencies would, but I think it's left to their determination to determine

when it's cost beneficial. Thank you for the question, Congresswoman. Agencies have a number of options for trying to recover improper payments. There are administrative possibilities, the options the Congress did just pass the Administrative False Claims Act in December, which is a significant new tool for agencies and OGS to work with jointly that allows agencies to go through a very rigorous process where they can then recover funds and damages in some instances.

But to your point, recovering funds through through the judicial system, the pay and Chase model we have now is exorbitantly expensive, which is why we and others in this hearing are focused on the prevention piece, because it is very expensive to do any of those recovery actions. So what investments could agencies take to prevent improper payments? Could investments in artificial intelligence help lower the improper payment rate?

What? Again, what we want to do is not have the payment go out to begin with by using what's available to the agencies now. So I'll start with you, Mr. Diefenbach. Yes. So technology is part of the solution. Another piece of it is culture is ownership, and the Inspector General Act was passed in 1978 to create this community of

watchdogs to prevent fraud. However, before 1978 and today, the agencies have the primary responsibility to do those things, to resource things properly, to exploit technology as you just mentioned, and to ensure that they're doing good risk assessments and they're following through on those to make sure they're mitigating the biggest risks in their programs. Miss Kozilek, any further comments? Yeah. So as as you mentioned, prevention is really the key in this and having the right data.

So artificial intelligence can be helpful if you have the right data in the system. So we do have recommendations to encourage agencies to collect all the necessary information that is needed to ensure the databases are complete, that they're accurate. If you're using artificial intelligence and other data mining mining tools, but you have inaccurate or unreliable data in the systems, that is not going to be very helpful. Thank you, Mr. Chairman. I yield back. Thank you very much.

Shell woman yields factors time, Mr. Mfume Jones recognized. Thank you again, Mr. Chairman. I'm got a couple of quick questions. I know we were a smaller committee and I'm hoping that we might even get a second round. And I want to obviously defer to both of the members here on my side of the aisle. I do want to be redundant, maybe deliberately redundant about a few things.

Number one, I appreciated the testimony that nearly all Medicare and SNAP recipients are eligible for benefits, which would explode the myth that's been circulating that people are getting things that are not eligible. I want to under score again, what I heard was that most improper payments are due to paperwork, paperwork errors and not necessarily conniving persons trying to find a way to

get a a check. However, what I think I want to stop on more than anything else is the notion that was just enunciated that we've got to stop it before it starts. And Mr. Diefenbach, I appreciate your comments that we can't play the game of of pay and chase that will go on forever deplete resources and frustrating everybody. I do want to ask if the 10 ready recommendations that you. Presented in your Senate, testimony can be made available.

I don't know that I have them, but I'd, I'd like very much to see them. And one overarching question. And then I'm I'm going to get out of the way and yield to some of my colleagues. Mr. Chairman, can all of you, individually or collectively give me your assessment of what has happened and what will happen now that all these inspector generals are no longer in place to do the good job that

they were doing? To point out the crooks and the bad guys and follow up with bodies like this, both in the House and Senate that would allow us the ability to do what we've been able to do in a bipartisan way? I just, I need, I know, I think what the effect is, but I need to hear it from the three of you, any of you. Sure, I can start. So certainly the Inspectors General play a key oversight role. They have responsibilities related to improper payments.

Beyond that, they do audits of the programs day in and day out and can be very helpful in identifying some of the root causes that may lead to improper payments in the programs. And then also they are really helpful in coming up with solutions once they identify those root causes, identifying recommendations that the agencies can take. So certainly the lack of their lack of their presence in some of the agencies would have a significant impact on.

And in many of the agencies, and I'm, I'm just trying to figure out now that they're gone, what do we do? I mean, what's, what are agencies faced with? And is there a greater propensity for the kind of fraud and abuse that we've seen? So Congressman of whom may the, the loss of the inspectors general was a great loss on a leadership level, on a, on a productivity level.

Our vice chair of the prac, Paul Martin was the USAID Inspector General who's dismissed and we we greatly miss his leadership.

I think the biggest thing for the Congress is you're going to have less transparency, less visibility on what's actually occurring in agencies, because that's one of the the hallmark principles when Congress set up the Inspector General Act was to give you and the taxpaying public more visibility and transparency on an objective view of what exactly is going on. So I think you're going to have

reduced visibility. Miss Wagner. And just to add an example to what my colleagues have said here, the HHSOIG is really important in supporting and funding state Medicaid fraud control units that investigate and prosecute Medicaid provider fraud. As I indicated, beneficiary fraud is very low in this these programs, but provider fraud is common.

In FY23, these units recovered $1.2 billion in criminal penalties and civil judgments and also the IGS and HHS would in audit eligibility determination processes. And they were very effective in identifying major issues in states such as duplicate payments to managed care organizations in incorrect interpretations of federal

policy and caseworker errors. So identifying these problems and working with them, working with the states to get them addressed is really a key role that is diminished right now. Yeah. I think it would be fair to say that their dismissal has clearly exacerbated a problem that is clearly out of control now. Mr. Chairman, I yield back. Thank you very much. Let me ask you question. Question. One moment please, Sir. Thank you very much. Does gentlemen have a question?

Well, no, I just, I was wondering if I could yield Mr. Mafumi a minute of my time. I was. Enjoying his line of questioning. As soon as we get to you, I bet he will take that and even more. OK. I just want to make sure I didn't. I'm sorry. Yes. Sir, as the gentleman does know, the Chairman wants us to get to the bottom of this, and I do not intend to cut us off. As long as we're staying in the margins, I think we're better off.

I think we're better off when Someone Like You does yield time to learn more about what's on someone else's mind. Thank you very much. I've now moved to No, you're great, you're great. I'm just saying I do want to. When we get to the gentleman, Chairman Palmer is recognized. Thank you, Mr. Chairman. Mr. Kosilek. In 2002, Congress passed Improper Payments Information Act. In 2010, Congress passed the Improper Payments Elimination and Recovery Act.

In 2012, Congress passed two more bills, the Improper Payments Elimination Recovery Improvement Act and the Improper Payments Transparency Act. Yet GAO said that the federal government's losing between 233 to 521 billion per year. If you just split the difference, that's $377 billion over a 10 year, 10 year window, that's 3.7 trillion not counting the interest that we're having to pay. And in regard to the Inspector general's, it sounds like we're not going to miss Inspector General.

I, I don't mean to be dismissive that I, I have great high regard for the Inspector General's, but in terms of actually lowering our improper payment rate, we, it's, it keeps going up year after year. How do you explain that? Oh, sorry, I'm looking at the wrong person. I can't, I need to sit up straight so I can see the names. OK, go ahead. I think we really need to get back to basics and having internal control in payment

processes. As you noted, there's been numerous amounts of legislation adding on requirements, reporting improper payments. But we really need to get back to the fundamentals of having internal controls in payment processes, understanding what the root causes are for the improper payments going out and focusing on on that, requiring agencies to report their plans for prevention to you and having accountability for having those prevention plans in place.

Isn't the problem though, the here the failure to have enforcement in any of these bills there? I, I've been working on since I've been in Congress. I believe I, I might have been the first one to, to get the Budget Committee to, to really take into account and proper payments and working with the, with Mr. Dodero this whole time on it. And it, it's, it's not getting

better. As a matter of fact, there's in, in fiscal year 24, there's 16 agencies that reported a total of about $162 billion and improper payments. And when you, when you dig down into it, about 5455% of the improper payment problem is administrative air, failure to verify eligibility and antiquated data systems.

Which brings me to Mr. Musk and I, I know there's a lot of consternation about what they're doing, but literally he's brought in some, some computer experts with 21st century technology and done better oversight of, of the federal government in the last six weeks and we've done the last 40 years. I mean, isn't that one of the biggest problems we have with improper payments is we've got antiquated data systems? We don't we don't have the 21st

century technology. We need to do oversight, proper oversight. Having reliable data is is very important. Having accurate, reliable, complete data in the systems to be able to do those integrity

checks is is critical, yes. Well, after we did pass the Improper Payments Elimination Recovery Improvement Act, and I know of one outside company that was brought in that did some analysis of, of Labor Department of Labor contracts and found millions of dollars in fraud under overpayments, other monies that should have come back to the federal government through credits that were not recovered. And, and when this was disclosed, the Department of Labor at that time basically

waved off as disinterested. Isn't that a problem? The pay and chase model is a problem. Trying to recover the payments after the fact is much less effective. That So what we need to do is focus on stopping it on the front end and that's where where we need the improvements in technology, where we need the

investment in technology. And this is a huge issue when when you're reporting 16 agencies are accounting for 162 billion ten year window, that's $1.6 trillion and we're running a deficit of over 2 trillion every year. If if you just look at the the totality of it, 3.77, 377 billion, that's 3.773, not counting the interest we're paying on that money because every dollar we send out improperly is a borrowed dollar. Mr. Chairman, I yield back.

At this time, thank you very much as things gentlewoman from Washington DC is recognized. Thank you, Mr. Chairman, for days. Just days after he took office, the President Trump summarily fired 17 inspectors general across 18 positions in the dead of the night. Inspectors generals fulfill a vital oversight and accountability function in the government, including through identifying and preventing improper payments.

I GS are also responsible for keeping Congress informed of fraud and other serious problems and informing us about progress in implementing solutions. As we consider, as we consider ways to attack the problem of improper payments, it is critical that we do not undermine these officials who serve as our partners in this fight.

Miss Wagner, I am aware that much of your work has focused on the challenges that states may have in complying with complex requirements for federal payments program programs. How do inspectors general help to identify and address these problems? Inspectors general play a critical role in auditing state operations. States are trying to run an accurate program, but they have many pressures on them and they sometimes make mistakes in their policy and their operations and their systems.

And audits through inspectors general and others come in and identify these mistakes and lift them up and hold the state accountable for addressing these. So it's really a critical role. And we're looking to improve improper payments and to get benefits to eligible people. Thank you Miss Co Select How does the firing of Inspectors General Inspector General affect Inspector General Office's ability to prevent and address improper payments?

The, the role the Inspector General plays is critical. One of the other things they're they're often the first line of defense in investigating allegations of fraud and improper payments. So without having, you know, strong Inspector General presence in there, that could, that can certainly be an impediment. They're also an objective voice in identifying problems and doing investigations. So certainly having a very strong Inspector General role is critical.

Inspectors general are rigorous evidence based use rigorous evidence based approaches to target fraud. This import this is important because a reckless approach to fighting fraud risks collateral damage. It could keep general federal assistance from from from going to those who most are in need of it. GAO's Fraud Risk Management Framework notes that agency should consider the cost of fraud controls when designing systems, including potential delays for a legitimate

applicants. Miss Koseley, how does the work of Inspectors General ensure that people get the benefit for which they are eligible? Certainly the the role they play in in a doing the various program audit. So certainly they have a role in improper payments, but they also as I mentioned, you know do program audits throughout

throughout the year. Looking at the operations of the various programs, are they being executed efficiently and effectively to make sure that the proper recipients are receiving the benefits that they are entitled to? Mr. Dieffenbach, the Inspectors General serving on the Pandemic Response Accountability Committee have done great work in identifying improper payments throughout our pandemic

response. What has been the impact of President Trump's purge of so many inspectors general been on the committee's work and capacity going forward? Well, we have lost again the leadership, the institutional knowledge of individual inspectors general, but the offices of inspectors general still exist and are fully

functioning. We work with them day in, day out on investigations and we are of course, an independent committee within the oversight community, the PRAC that does operational data analytics literally every day to support investigations, to proactively find problems and to issue reports on lessons learned and preventative measures that agencies can follow going forward.

So we are continuing to do our important work to support the OI GS and to be a centralized hub, if you will, for analytics to support the OI GS that are smaller. They don't have their own capabilities. Thank you and I yield back. Thank you very much, the distinguished old woman. We're delighted that you're here. And as you have proved in your service, we all want to as well. Mr. Infamain, your side want to stop improper payments and move to the areas that they would be

needed. We now would move to distinguished gentleman Mr. Gill from Texas. You're recognized. Thank you, Mr. Chairman. Thanks for holding this hearing today. Miss, Miss Co Select, thank. Thank you for being here as well. Could could you remind us in fiscal year 2024 what was the the amount of improper payments that were sent out? $162 billion. OK. And and which agencies were the were primarily responsible for that?

Some of the programs that had the largest dollar amounts were Medicare, Medicaid, Earned Income Tax Credit, some of the larger ones. And, and how much do you guys at, at the GAO estimate we lose in fraud every year? We did a fraud estimate for looking at data for years 2018 through 2022 and we came up with an estimate of 230 to $250 billion. In in what agencies do you primarily see fraud? That estimate was based across all programs. OK, got it.

So if I'm in let's just use a a specific example. If I'm a a fraudster and I want to collect unemployment checks that that I shouldn't be receiving and I steal somebody else's identity to do that, and I apply and apply to the Department of Labor, what are the processes that that you would expect to see the Department of Labor go through to ensure that I don't improperly or fraudulently receive a check? So unemployment insurance is an interesting one. It's a federal state partnership

program. So there are responsibilities at the federal level. And at the state level, as I mentioned, really having those preventative controls in place, doing those data matching checks are some of the the key controls that you could expect to see to have an entity have in place. And in this case, you need to have those types of controls in place at the state and at the federal level. What? What do we actually see on a on a on a realistic basis? How?

How often are some of these checks actually applied? We have seen instances and had recommendations for unemployment, I believe where there could be additional use by the states of some of those data checks. And I believe we have some recommendations that there could be requirements to have the states be required to do that data match. Right now it's encouraged, but there are, we have found instances where in all cases that is not being done and that can be a root cause of some of

these improper payments. So, so in other words, we're we're mailing out checks without verifying who they're going to. In some cases. Got it. And and what are the consequences for agency heads as they're mailing out American taxpayer dollars without without

verifying who they're going to? The consequence is that the anytime there's improper payments or fraud or money going out for not the intended purpose, that's money that could be going to rightful recipients and used for other purposes. Right. But I mean from a, from an incentive standpoint at at on the agency level, is there any consequence for for either employees at the agency or agency heads for mailing out checks fraudulently?

One of the things we have recommended is having an accountable official at the agencies. As opposed to the recommendations right now, are there? Is there anything to hold these people accountable? Agencies are supposed to have an accountable official to to but we've. But but what? What is the accountability structure? Do they do they receive less bonuses? For instance, are they fired? What it What is the? What's holding them accountable?

I think that is determined by the agency as to how that mechanism is, is 100% set up. But certainly Congress can have accountability. Mechanism. What do you see? Do you see? Have you ever seen an agency head get fired, for instance, for mailing out billions of dollars in fraudulent checks? I have not seen that. Got it. OK. And once we once we mail these checks out, is there any way to of clawing this money back and and holding the fraudsters accountable?

That's what you're saying that the pay and chase model is is not generally effective. There are requirements that anytime there is an improper payment, agencies are supposed to attempt to get that money back. But we have found that the percentage that you get back when you're when you're following that model as opposed to not having to go out preventing it, is, is by far much more effective. Right, right. Completely agreed. I mean it.

It seems to me that we've got a an overextended, bureaucratic administrative leviathan that is mailing out American taxpayer dollars fraudulently with virtually no and no accountability at all, bankrupting the American people with impunity. And this is from a federal government that ostensibly works in the interests of American citizens, is instead wasting our taxpayer dollars on a on a scale

that is difficult to fathom. I think this is precisely why we need those so badly to get this nonsense under control. And with that, Mr. Chairman, I yield back and thank you very much. Appreciate the gentleman's questions. The distinguished gentleman from Washington, Miss Randall, is recognized. Thank you so much, Mr. Chair, and thank you as well to our witnesses for taking the time to be here today and share your

expertise. You know, I've been pretty open about sharing my sister Olivia's story. She was born with really complex disabilities and was able to receive the care she needed because of Medicaid. And she was one of an estimated 2.4 million Washingtonians enrolled in Apple Health, our state Medicaid program. And so ensuring that we are protecting that program is, is very important to me, not just personally, but on behalf of all

my constituents. And I think I share the goals of so many of my colleagues here to ensure that we are using taxpayer dollars efficiently to provide essential services to our neighbors who need them. But what we may have some disagreement on is how to make the federal government and our programs work better for the American people.

You know, my colleague talked about fraudsters and certainly there is some fraud in some of our programs, some improper payments, but I think what we also have to under score is the individual people that are trying to access these programs.

And we had a subcommittee hearing on healthcare and financial services a week or two ago in which we collectively bipartisanly discussed and understood the barriers that exist for many families trying to access Medicaid, including and especially those married couples that have a hard time getting the healthcare that they need to be successful. But I want to reiterate the difference between fraud and people perpetuating fraud and the improper payments.

And Miss Wagner, could you reiterate, is it true that the vast majority of of improper payments are paperwork issues, not fraud? Yes, that is correct. It's usually a mistake in the process. When you talk about a program like Medicaid, it could be an mean and eligibility worker didn't follow correct procedures or the participant was issued the wrong amount of benefits. But it's often an error and inadvertent error by the household or a mistake by the agency staff or system.

The incidence of fraud, which is intentional to seek to gain a benefit, the incident of beneficiary fraud is very low on these programs. Yeah. Thank you. You know, you know, I experienced in my family and heard so many anecdotes from Washingtonians, particularly parents of severely disabled children who have this like, stack of paperwork on their counters, who feel like they need to be attorneys in order to access a system to provide healthcare for their kids.

And who are overwhelmed so often with late nights, little sleep, worry about what, you know, new medication their kids need to be on, what specialist appointment they need to get into. Who spends so many hours on the phone appealing denials of claims, trying to get into an appointment with someone, trying to get answers for their kid and take care of them while many of

them also have another day job? This, you know, to characterize these parents as fraudsters or to try and lump in, you know, individuals who are just trying to stay alive in so many cases feels really challenging to me. And, you know, I talked to the healthcare authority in Washington, our agency responsible for administrating Medicaid.

And because of Washington's fraud abuse detection system, which I supported funding for as a member of the state Senate, they have uncovered 35 to 40 credible allegations of fraud. That's 35 to 40 out of 20 million claims that they receive a year. And to do that math for us, it's .0002% of fraudulent claims. And, you know, none of us are claiming that no fraud exists. But I think we need to keep in mind the scale of the problem here and who is perpetrating the

incorrect payments. I also want to raise one thing that the Health Care Authority suggested might be helpful as we talk about efficiencies in government. And they said that there is a a federal system to which they, as states, don't have immediate access to understand whether folks are concurrently enrolled in Medicaid programs from one state to the other. I know you know, there is.

We will have in the next couple of years some changes to that database to monitor when someone moves and changes their address. But it doesn't allow agencies like the healthcare authority in Washington to track whether there's concurrent enrollment. And that would be something that I'd love the chance to work on with my colleagues and I yield my time. Joe Woman yields back her time. Thank you very much.

We've moved to distinguished gentleman from Tennessee, Mr. Burchett. Thank you, Mr. Chairman, and thank you, ma'am, for sharing that story about your sister. I did not know that. That gave me a lot to think about. Miss Koshiya Lek. Is that correct? And I get that close. You got Kwas and the Fumi and Tim Burchett up here. We can. Nobody gets our names right. And I probably didn't get his name right. So let me ask you a question, ma'am.

If I can see through this big head of hair right here in front of me, what, what are some of the key issues that prevented these agencies from prioritizing prevention of improper payments and fraud? And I wish you'd also talked a little bit about just human error, how that plays into this. Yeah. So there's something that can be human error and I just want to clarify the fraud to be sure,

fraud is a big problem. The fraud numbers that we estimated over those years was about 3 to 7% of of the funding. But to be sure, as we noted, you know, any amount of fraud is, is money not going to the intended purpose.

So some of the key issues I think that prevent folks from being able to effectively put the right controls in place does have to do with some data sharing, some access, having truly understanding the eligibility requirements, the data attributes that should be checked and then having that right information to be able to do that. Checking to make sure that the payments are valid.

Going to the right person is really what's critical and can be some of the key challenges and issues that agencies face. The agencies in 2024 fiscal year 2424, they collectively estimated approximately 161.5 billion in improper payments. Do you think Congress can can get to the point where we can stop that? I think the goal is to reduce that. You'll probably never get rid of the risk of fraud. It's innate in all programs.

But there should be a concerted effort to have that as low as possible and and have the right preventative controls in place to not leave so much money on the table to that. I guess in this case it's the original sin, so to speak, Yeah. How many agencies and programs are using the GA OS fraud risk framework now? And why aren't they using it?

The ones that aren't just. You know, I don't know if we know the, the, the true reason why not all of them are using it. We do certainly have a recommendation to Congress to require agencies to use that. We think it's a critical. And and they're currently not required. They're not required to follow that. Not specifically. OK. Thank you. What can we do to enable that these agencies recover over payments or are they just gone? I always hear people say, oh,

we're going to call that back. I was in the legislature in Tennessee for 16 years and I never saw. I mean, it's hook or crook, you know, it's a bogus corporation or something, got money somehow or some criminal and they're in jail. They're not paying it back. They're getting $0.20 an hour stamping out license plates. And that's the challenge. In many cases, it's not easy to get that money back. OK, Thank you.

I need and I want to yield the rest of my time to my dear friend, Mr. Mafumi, if that's all right. Thank you, Mr. Chairman. Well, I want to thank the gentleman for yielding. Totally unnecessary, but you're not making any points calling me a gentleman. Mr. Burchett and myself were like a guitar and a fiddle. We both have strings, but we make different sounds and we've

worked together whenever we can. Usually we're 100% on different sides of the aisle, but at moments like this, on something like this, I appreciate the gentleman for yielding, appreciate his sense of humor and the ability to work with him. I do want to just go to two quick things that I heard that I don't want to have fall to the wayside and get out of the way for the other members, particularly Mr. Frost on our side and whoever, Mr. Chairman,

you have next. Coming up, Mr. Palmer made a good point, and I'm really sad that he's not here because he talked about this whole enforcement mechanism and whether or not there is any enforcement mechanism. And without an enforcement mechanism, how can you expect agencies or agency heads to do anything at all if we're not going to enforce existing law or practice?

And the other interesting thing was Mr. Gill mention consequences to agency heads, which I think is something that we ought to talk about, particularly the flip side of that, which is incentives to agency heads. And I don't know if we are providing them right now. So if I'm running agency AB or CI, see a problem and I work my tail off to get it fixed so that improper payments are not going out, seems to me there ought to be some incentive there for

agency heads to do that. And there ought to be a hammer on the other side for agency heads who fail to do it at all. So I just wanted to go back to both of those points. I want to thank the the gentleman, I'll call him a gentleman again from Tennessee, Mr. Perchard, for yielding this time. And I yield back, Mr. Chair. Mr. Bircher yields back his time. Thank you for the distinguished gentleman.

We'd now recognize the seniors gentleman from Georgia, Mister Jack. Thank you very much, Mr. Chairman. And first and foremost, if I could follow on that effective line of of of statement from Mr. Mufume and that potential line of questioning. I was also inspired by Mr. Palmer's statements as relates to enforcement. If I could just go down the the line, what say you about enhancing the enforcement capability, whether through legislative action or executive

action? Yeah. So I think holding people accountable is critical for doing anything. But in this case particularly, certainly I think agencies should have accountable officials and hold those people accountable. And like I mentioned, Congress can have an accountability role too, through the appropriations process, through having agencies and and officials report on their preventative controls that they're putting in place to hold them accountable and demonstrate

how they are doing that. Thank you, Mr. Difenbach. Thank you for the question. So we spent the last five years at the prac developing and learning lessons learned. We put out a program for Blueprint for program integrity. So agencies need to to operationalize that and follow that. We have perfected ways to find simple frauds and more complex frauds.

So I think one of the answers is they need to have the tools to be able to detect again the simple non eligibility issues, but also the more complex hidden criminal enterprise, sometimes International Criminal enterprises, which we've done a good job, I think a phenomenal job of of finding new ways to do that with big data. One of them Miss Wagner. The key to preventing improper payments, reducing fraud is information and technical assistance to the states.

States are trying to run a good program. They don't want headlines, they don't want their their money going to the wrong people. And so by supporting them in these efforts with funds, with federal support, we can go much further penalizing them. Massive cuts to these programs will actually go against this purpose and will lead to

increased improper payments. Thank you all just for in closing, a lot of my colleagues have asked very effective questions today, but I love history and I would love if I could miss Kosciolek. I think we've, we understand since 2004, 2003, we've seen 2.8 trillion in improper payments. I think that's from GAO. Is that correct? And would you say has there been an influx in recent years if you were to try to catalog year by year?

I mean, it's trying to understand the history of of of how this ramped up. And, you know, is this something that was happening the 40s, fifties, 60s? Have you seen it just really skyrocket as government's grown and government programs have grown? Would love for you to just offer some thoughts on the history of

how we got here. Yeah, I think certainly some of the challenges and and as we mentioned, the importance of having really foundational good internal controls is critical so that over the years as emergencies are going to arise, you have those foundational controls in place, you have plans and controls ready to go. I think, you know, as agencies and the government is forced to function in dynamic ways, if you don't have those foundations in place, that's when I think you

see that fluctuation and that just exacerbates the problem. Sir, if you want to comment on the history of how we got here. Please. The threat is always evolving. The friction for getting public benefits is gone. Anyone with a computer anywhere in the world can apply for public benefits. Some of those programs have a lot of protections in place as we found a pandemic for our work. Many did not.

So it really takes a big data approach using all the tools available to find the hidden connections that you can't find manually. We're working on, we're aware of 142,000 known pandemic fraud cases and they have a fingerprint. And we've been able to figure out that fingerprint. And our hope is to be able to continue our work to help people proactively defend against these things and prevent them early, because you cannot fight today's fraud issues with yesterday's tools.

Wonderful Miss Wagner. So Medicaid and SNAP are a little bit different than some of the other programs that are more recent or were really ramped up during the pandemic. They have a long history of working to reduce improper payments. They were challenged during the pandemic by some new programs, by increased demand and by

reduced staffing. So now we really need to kind of look at the other side of that and stabilize the workforce, improve the IT systems to continue reducing those rates. I'd like to thank all three of the witnesses for appearing before us today. I want to thank the Chairman for calling this hearing. And with that, I yield my remainder 30 seconds to the Chairman.

Thank you. Appreciate the distinguished gentleman and welcome him not just to the subcommittee but really to Congress with an eye towards as a new member as well, some other people, including Mr. Frost. Mr. Moss was making sure that their words that they say back home are met with the reality of other senior members working with you to achieve those things. And I think that that's the sense that I get that it's a 100% buy in that we have about the problem.

Mr. MFU Mayor, want to come to a 100% working towards that answer and I want to thank the distinguished gentleman. Thank you, Mr. Chairman. The same gentleman from Florida is recognized. And good to see you, Mr. Frost. Thank you. Thank you. Thank you, Mr. Chairman. Hello. Thank you so much for for being here today.

You know, when I was back home and in the District over the weekend, everywhere I went to grocery store, walking around the park, doing anything, people were coming out to me asking about Social Security. And I think a lot of people are worried and scared right now. I think part of it has to do with a lot of the myths and disinformation that's going around. I mean, we've heard this constant lie from Elon Musk that 10s of millions of dead people are getting Social Security paychecks.

Claiming fraud. And Social Security, I think is one way that folks are going to justify cutting it, pocketing the benefits for billionaires, privatizing it. Miss Kosilek, Elon Musk is now calling Social Security a Ponzi scheme. How concerned are you that Social Security is a Ponzi scheme? I don't think we have seen indications in our work that that is the case. Musk is calling it a Ponzi scheme as an excuse to destroy it.

In my opinion, Americans earn Social Security, three years of hard work, and it's a good investment. It could be a better investment for Black men because we're pretty much donors because we live less time. But that's another conversation for another time. It's one of the most popular government services. And most people support more funding for Social Security, not less. Miss Wagner, You know, people want shorter wait times, payments processed more quickly.

But at the same time, the administration wants to cut 7000 employees from the administration. Yesterday somebody from my office called Social Security 30 days to process something on retirement, 30 days on Medicaid, 230 days as it relates to disability. What would be the effects of these cuts to the Social Security Administration right now?

When staff shrinks, there are fewer people to take appointments, to answer phones, to process applications for different benefits, and that hurts people nationwide. And in addition to their own staff, Social Security Administration funds state Disability Determination Service employees who decide whether applicants disabilities are severe enough to qualify for benefits. Their processing time was already at a record high of seven months, and we expect cuts will have further impact.

In addition, 7 in 10 of Social Security staff do serve the public directly, so this will. Will have a major impact on customer service. Thank you. It's and it's not just, you know, billionaires like Elon Musk who are going around attacking it. My own Florida Senator, Rick Scott, the richest person in Congress, which on the topic of fraud, you know, my senator made history. He's the man responsible for the largest Medicare fraud in the history of this country, $1.7

billion. He says that Republicans are going to have to cut Social Security and quote, why are they doing this? Well, to take money from Social Security to use it for tax cuts for people who are too rich to need it. House Republicans plan to make $880 billion in cuts to healthcare. This means cuts to Medicaid and Medicare, too. Miss Wagner, Four and eight American children are Medicaid recipients, including over 60,000 people in my district

alone. For an Orlando family currently receiving Medicaid, what could be the financial fallout from losing access to Medicaid? Well, first, when states are forced to cut back on funding, they are going to cut back on who's eligible and the benefits they receive. But cuts will have broader impacts than just those who are no longer eligible. They will directly or indirectly affect the amount of funds available for state staff, for IT systems that support Medicaid.

And they'll probably lead to more improper payments and reduce program integrity. And it will impact people who even whose eligibility isn't cut longer call center wait times, more errors, uncertainty, stress, and possibly not be able to get approved for benefits or losing coverage at renewal even though they remain eligible. Thank you.

You know, before coming to Congress, I worked in organizations and one of the proudest things I did was work at March for Our Lives. They came after the shooting that happened in Parkland. I traveled this country speaking with people that disagreed with me on the issue of gun violence.

But it made me a better person. And something I learned during my travels is in order to speak about something in a bipartisan way, I think it's really important to make sure people are coming at this on the right foot in good faith. And I'm all for the modernization of our government. I think it's really important. And I say that's the youngest person in the United States Congress.

I think it is very important. But when I see the people leading the effort, like Elon Musk call something like Social Security a Ponzi scheme, and I hear crickets on the other side of the aisle, I have a really hard time taking any of this seriously. When I go home and I have people coming up to be in the grocery store who are living paycheck to paycheck asking me, what are you going to do to protect Social Security? So thank you so much and I yield back. Jim and yields back his time.

Distinguished gentleman from Florida, Miss Moskowitz, who's asked to be waved on this committee server. Delighted Chair. Gentleman's recognized. Thank you, Mr. Chairman, Thank you for granting my waiver. I, I appreciate it. You know, I've been committed to helping the government become more efficient, save dollars, go

after fraud, waste, abuse. I was the first Democrat to join the DOGE caucus, which by the way, hasn't done anything and has not been included in anything Elon Musk has done. But you know, it's nice that we have a we have a caucus. And so this is this is a bipartisan effort. Like the chairman mentioned, we do want to get at waste, fraud and abuse. But I do think the spelling, miss, the spelling fact from fiction is important.

And I want to drill down real quickly first on what my colleague from Florida, Mr. Frost, said. And I'm going to be even more direct because I think it's important. We'll just go down the line. So you gave a, an answer on whether Social Security is a Ponzi scheme. The answer is no, right? It's not a Ponzi scheme. We have not reported that it's a Ponzi scheme. Right, so it's not a Ponzi scheme. I'm not aware that it's a Ponzi scheme. OK, agreed.

OK, so Mr. Musk is wrong. No one, no one's going to get fired for saying it, right? He's wrong. You can say it. It's not a Ponzi scheme. I'll say it for you. It's not a Ponzi scheme. It's not a Ponzi. OK, He's wrong. I know we're afraid to say it. And see, that's part of the problem. We're afraid to say that Elon Musk is wrong. That's what Mr. Frost was talking about. When he says he hears crickets from my colleagues, we hear crickets from the witnesses

because everyone is afraid. When Elon says something, if it's patently false, we're afraid to say it's false. All right, let's talk about something else. The the IG is getting fired. You support the IG is getting fired at me. I got to imagine if you're interested in getting rid of fraud, waste and abuse. They're the people. Trying to get rid of fraud,

waste and abuse. So they got fired from Agriculture, Interior, HUD, Department of Defense, the EPA, the State Department, HHS, Veterans Affairs, Labor, Transportation. You support that in the mission of getting rid of fraud and waste and abuse. The Inspector General committee is is critical. There are certainly an. An administration can give. No opinion whether that was good or bad. Again, I we won't say Elon's wrong. I know you you won't go there, but was that the right decision?

You did lose institutional knowledge. Certainly administration has a right to change the inspector generalist. There are reporting mechanisms of. These weren't necessarily in like in like let's use numbers, let's use data. So like 514951 bad idea. That was a bad idea. I'm trying to. The proper protocols weren't followed in. Oh, we know it was illegal. Don't get me wrong, I didn't. I didn't want to make you say that. I appreciate you saying that on the record. It was illegal.

The proper protocols weren't filed. But is it good policy if you want to go after fraud, waste and abuse? Was that good policy? To lose institutional knowledge. No, not good. Good policy. I don't think it improves the ability to fight fraud waste. Abuse, not good policy. Not good policy. OK, right. And if you're telling the American people that this is a focus of your administration and then you go fire all of the AGS, that doesn't seem to compute. OK.

Lastly, did fraud and an improper payment start with Joe Biden in his administration? Was that the first time the government has experienced that? That is not the first time no fraud was reported. First time, no. First time, no. So we got to depoliticize this stuff because all we're heated hearing is what happened in the last four years and the last four years in 2017, $140 billion of improper payments that's inaccurate in. 2024 we reported 162 billion. No, no, hold on.

In 2017, 140 billion in improper payments, In 2018 a $150 billion of improper payments, In 2019, 174 billion of improper payments, and in 2020, two 106 billion of improper payments. Those are GAO numbers. So let me just do some math. In the first Trump administration, there were $670

billion of improper payments. I'm not blaming him, but he is blaming Joe Biden, and so is Elon Musk blaming for the improper payments for what happened in the four years of Joe Biden. My point is, Mr. Chairman, if we do want to solve this on a bipartisan basis, then we got to separate fact from fiction. We got to depoliticize it, $670 billion of improper payments and fraud, waste and abuse in the first Trump administration. Isn't that correct? Correct. Isn't that correct?

I don't have any reason to dodge your math. OK. Isn't that correct? I believe? So perfect. Thank you, Mr. Chairman. Does gentleman seek to give back his time, or is gentleman? Mr. Chairman, I had no time back, but I will. I'm happy to give you. The gentleman your ranking member has asked if we would have a second round. Distinguished Gentleman's recognized Mr. Vome well. Thank you very much, Mr. Chair.

I want to thank Mr. Mark Goods and I to the gentleman from Florida. I will say Elon Musk is a lie on the record, which I've said many times. So I guess he's coming after me. One of the things we want to do here is to allow everybody freedom of expression.

This is an issue particularly for the chairman and I. We've been working this for a long, long time, and getting to the root of this by implementing what we're hearing today and what we've learned from previous hearings is extremely, extremely

important. I don't want to be redundant, but again, this whole notion about do we have an enforcement mechanism in place when agency heads just watch this sort of thing occur under their tenure and do nothing about it, or watch it and feel like they can't do anything about it? And for those brave souls who do, how do we reward them? And what what do we do as a Congress to make sure that we were tightening up their spine and that they're doing the right

thing? I think it's fair to say that there will be legislation coming out of this hearing at some point in time. I know the chairman has expressed an interest that I hope to join him in that regard. If we don't do anything else, once the shouting and everything else is over with, we've got to find a way to make sure that dollars that could be used to help people in this country actually get to people. If we're able to slow down this. I can't call it a trickle of fraud, waste and abuse.

An avalanche that has been going on.

And I've been looking at the GAO numbers going all the way back to 2003. So Mr. Markowitz was right, it didn't start under Joe Biden. This has been going on and on and on, and I think we will have a gross failure on our part if we don't find a way in this committee with this win to our back to do something about it. I it's, it's going to take calm, clear thinking, a resolute determination to make sure that whatever legislation we are able to come up with jointly over and

over again that passes really does get us to where we want to be. I would think that everybody in this country is appalled to know that there are crooks out here who feed on the government, who lie, who cheat, who steal, who deliberately find a way to get around the law. And I don't know that there's any safe haven for those

individuals wherever they are. I do know that we've got to bring the hammer down on them, which is why I'm so dismayed that the inspectors general are not in place to do just that. They had started a process and it was yielding results. So I'm going to yield back to our our chairman. My commitment is to work through these issues, to work in a bipartisan way where possible. And I hope that's very possible.

And to keep saying what we've been saying over and over again, which now is starting to get some sort of audience just because I guess Elon Musk has a bigger bullhorn than my microphone here. But we've been at this. This is not new. And we've got to find a way to do it in a way that is surgical, deliberate, verifiable, and allows for due process. With that, I'm going to yield back. Thank you, Mr. Chairman. I appreciate the time. Thank you very much.

And also, if the gentleman does, I don't know if that was your closing comments. OK, then I'm going to yield myself my time and then I probably will can put those together with my closing comments and then we'll get out. I want to thank the not only the witnesses who are here today, but some of the other who are others who are in the audience.

I think today you saw a very classic events that happen almost every day on the Hill and that is people miss the opening statements, they miss some of the Nuggets of information that each of you gave. But what resides in each of us is a desire. When we hear the term $800 billion, whether it's waste, fraud or abuse or unintended payments, what whatever you would want to put that term with, it is frustrating. It's frustrating for us.

It's frustrating for you. I will tell you that I think what Mr. Imphume described was the two of us when he said the answer needs to be, I think the answer needs to be a bipartisan answer. I think it needs to be looking at this together. I think it needs to be this subcommittee through his leadership and perhaps hopefully through mine, that we can guide us to decision making, that his strong voice, my voice, can move us where we need to go.

Where is it that we need to go? I think today that we heard about the pandemic Responsible Accountability Committee is one of those answers. It is an answer that it currently exists and it was a bipartisan answer. It still maintains a good bit of data, but it was done just for the pandemic. It was not done for other programs that would reside across the government.

I think that the expertise that Mister Deffenbaugh spoke to me about yesterday when I met with him for a good period of time was that he sees that they could be a potential front side answer to not just waste, fraud and abuse, but on an individual basis for the various organizations, Social Security, Veterans Affairs, IRS. We spoke about how 18F us for some time provided some assurance that they would know who a person was on coming in, but we now recognize it didn't

quite work that way. But the Pandemic Response Accountability Committee has effectively been able to prove that the work that they have done. And so a piece of legislation, I spoke to Chairman Comer about it this morning, will be in order within two weeks. We're going to go to a markup. We are going to work together. We're going to, I think, see the same answer. And that is we think that you worked, Mr. Deffenbaugh. We think that that answer is an upfront answer.

And we will then have to find a way to mirror not only what you do, but find a way to bring the avenues of data and information upfront and apply those same principles to the biggest problem. I don't think that we'll go overnight directly to you. I don't think your staff for that. I don't we'll work together. But I do think that the answer lies in upfront gaining the information. If the members had all been here upfront, they would have heard all three of you concur on that.

They would have said, well, we need to do this on an upfront basis as a person goes through this process, in particular, before we send out billions or trillions of dollars to people, which is something that I've tried to echo. Our government is not prepared to send money out on a mass basis at this point. We are not prepared. And I'm not trying to disappoint anybody in this administration, but we're not prepared for it. We need to get prepared.

And I believe that Mister Infume and I, who've been given this authority and responsibility, will continue to work with you. I'll be quite honest, I was delighted with what I heard yesterday from GAOI think that they have provided us a lot of information which is allowing us to hone in not only on the

problems but the answers. And I think if we move our self to answers through a process that people understand and expect, it will mean that a lot of people gain confidence in not only the federal government but the workforces that are there. Lastly, I don't want to do this necessarily because the gentlemen are not here, Mr. Frost, Miss Moskowitz, but it I, I think might be slightly a revision to what he said about their hearing. Crickets. In fact, the $800 billion is a 10 year number.

These will be votes that will be taken. And we have already seen where these numbers which are being looked at by this Doge organization. O MB, O MB in the government is reporting that they believe the huge numbers of quote cuts could be achieved by reducing the amount of unintended payments and we could look back.

I did not do that to to line up whether it's Medicare, whether it's Medicaid, whether it's VA, whether it's SBAI did not look at that from the information that GAO has given us. What I will tell you is, is that people like me, and I think people like Mr. Infume want to do something about it. People like me, I am a Republican, believe that we can get credit for cutting waste, fraud and abuse.

And we have laid down the gauntlet to say we are going to do the things that would be necessary to cut unintended payments, and we're going to work those into the government. And we're going to make sure this happens. And that will be done on a bipartisan basis. But for us to assume that we cannot make this better by growth, that we would make it better by growing the organization, I would submit to you, I don't agree with that.

I don't agree that we can do it by keeping workers at home rather than in the office, working with databases and figuring out who wants to get committed. And this is where I saw the process that is political, where the president said if you don't choose not to want to come back, He understood that he would offer a buyout plan that was

immediately attacked. We live in a political world and there are people who will attack President Biden or President Trump just from their word go, the word go of their name. So I would submit to you that I think that we are not having crickets. We are having a plan that we're laying out. I've got to do a better job as one of the Co chairman of DOGE. It is my opportunity and my real need to talk to the American people with clarity.

But as the father of a Down syndrome young man who is 31 years old, I too have been through and seen how our services that we offer to those people who cannot take care of themself and their families should not be the ones that find themselves on the wrong end of these changes. It is true what was stated to hear today that families that have disabled people, disabled children, disabled adults, people they care for have a higher threshold of frustration

of working through the system. And I think that system will get better as we hone ourself through the work that would be done on a bipartisan basis and less fear. The fear that people have about losing Social Security is in fact not true. It would not be true. It is not the goal of Elon Musk or of this government, and I do recognize there have been some words stated about their problems with what they see as an aggregate amount of

unintended payments. But I will tell you that there is more than enough room to stop the unintended payments that would equal the amount of money that is almost destined to be cut. We deal with 10 year numbers, not one year numbers. We deal with numbers that are exponentially high. And it sounds almost like, Oh my gosh, they're going to shut down the program. In fact, there needs to be thought process behind it. I am no way am afraid of a town hall meeting of explaining what

we're doing. But as a member of Congress, if we accept that where we are and where we have been is acceptable to our future, we are missing the boat. So I would ask that each of you know that you got asked tough questions today. Doesn't bother me.

But to have the confidence that if we move forward together, including Mr. Mfume and myself, that we can end up in a point where we look at each other and say we made this better, We saved the money that was actually destined for people that it was intended to, and then we'll see what the score is. I have great confidence we can do this. So I do not want to a conversation that they hear crickets to be part of this.

There are not crickets. There is a really daunting task of us to take this $1.7 trillion or $2.7 trillion, whatever the amount was that is laid in front of us. And we were never talking about cuts that were bigger than that. We were talking about cuts that are way less. But that makes sense. So I want to thank each of you for being here today. I think each of you did well

enough to be invited back. But perhaps more importantly, we would like to work with you and Mr. Mfume and I are going to deal with this and legislation will pass it to you and also see if you would, what your opinion might be for that. But I want to thank you each for being here today. The gentleman Does the gentleman wish to further time? Just to thank our witnesses. We do thank our witnesses and

that they stick around a second. Mr. Mfume and I are going to end this hearing and come and thank you for being here. This concludes the hearing today. I want to thank the witnesses and you're now excused. My script, right? Whoops, we will. Where's the five day? Well, hold on just a second. I'm sorry. We will. Without objection, we will extend to where's the statement you want me to read The five days? It's all 5 legislative days for people to ask for questions and

to receive information. Where is that bill? Where is it? I don't see it, and I apologize. It's a normal thing we do. There you go, Crystal. All right. That's unanimous consent that all numbers. For our phone, yeah, I've. Legislated. Yeah, I know what it says, but I'm going to read. Oh, there it is. With all that said, without objection, all members will have 5 legislative days within which to submit additional written questions for witnesses, which before did the witness for their

response. There's no further business. Without objection, Subcommittee stands adjourned. Hey, thank you so much for listening today. I really do appreciate your support. If you could take a second and hit this subscribe or the follow button on whatever podcast platform that you're listening on right now, I greatly appreciate it. It helps out the show tremendously and you'll never miss an episode and each. Episode is about. 10 minutes or less to get you caught up quickly.

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