The taxpayers’ State of the Union

OPINION:

The state of the union is far better than it was under President Biden. Inflation is much lower, gas prices have plummeted, the 2017 tax cuts were extended along with new tax benefits such as no tax on tips or overtime, and regulations have been slashed more than under any other administration in recent memory. The stock market has reached a record high, investment by American businesses is skyrocketing, and Congress passed 11 of 12 appropriations bills and moved numerous waste-cutting bills to President Trump for his signature.

Still, as in every other time in U.S. history, more can and must be done to eliminate waste, fraud, abuse and mismanagement. The Congressional Budget Office’s 2026-2036 budget outlook changed little from its prior bleak estimates of significant deficits and unprecedented growth in the national debt. From fiscal years 2026 to 2036, gross federal debt will rise by 62%, from $39.4 trillion in 2026 to $63.7 trillion in 2036. Net interest on the debt will average $1.5 trillion during that period and will continue to surpass every other area of federal spending, except for Social Security and Medicare.

Government and private sources have hundreds of ideas to make the government less wasteful and more efficient, helping avoid CBO’s estimates of disastrous increases in the national debt. Members of Congress and executive branch leaders are aware of these recommendations but have lacked the will to adopt enough of them to move the country toward a balanced budget.

CBO periodically publishes options to reduce the deficit, and the Republican Study Committee annually releases a balanced budget proposal. Since 1993, Citizens Against Government Waste has been issuing Prime Cuts, a compilation of recommendations from public and private sector sources covering every area of spending, including agriculture, defense, earmarks, health care and transportation. Prime Cuts 2024 has 539 recommendations that would save $377 billion in the first year and $5.1 trillion over five years.

One of the most persistent areas of waste and mismanagement is improper payments, which the Centers for Medicare & Medicaid Services estimated totaled $56.7 billion for Medicare and $37.4 billion for Medicaid in fiscal year 2025. Since 2003, $2.8 trillion in improper payments has been reported across federal agencies. Although several bills have been signed into law since 2002 to report and eliminate improper payments, much more needs to be done.

For example, on Feb. 10, Mr. Trump signed S. 269 into law, which permanently prohibited deceased individuals from receiving federal payments. The legislation finally forced the Social Security Administration to share its Death Master File with the Department of the Treasury, raising the obvious question of why that was not included in the first improper payments bill in 2002, or at least sometime before 2026. Cutting improper payments for Medicare and Medicaid in half over five years would save $47 billion.

CMS is also responsible for the Center for Medicare and Medicaid Innovation. The program was established in the Affordable Care Act in 2010 with a mandatory 10-year budget of $10 billion. It was supposed to test and create new payment models that would ostensibly save money and improve health care quality in Medicare, Medicaid and the Children’s Health Insurance Program.

CBO originally estimated that the Center for Medicare and Medicaid Innovation would save $2.8 billion from 2011 to 2020, but the bureaucracy ended up costing taxpayers $5.4 billion. Through 2030, CBO projects that the center will lose another $1.3 billion, but only if it meets rosy assumptions about efficiency and improvements for which it has not yet proved capable.

A June 2021 analysis of 174 models found that only four reduced spending or improved quality enough to be expanded nationwide. Nowhere else but in the government could a failure rate like the Center for Medicare and Medicaid Innovation’s be tolerated.

The center not only costs money and fails to help patients or generate savings, but also pursues sweeping nationwide policy changes instead of limited tests with its models. Some of the models would open the door to government-run health care instead of empowering patients and promoting competition.

In December, the Center for Medicare and Medicaid Innovation released the Global Benchmark for Efficient Drug Pricing model in Medicare Part B and the Guarding U.S. Medicare Against Rising Drug Costs model in Medicare Part D. They mandate the use of most-favored-nation price controls that tie U.S. drug prices to those in countries that rely on socialized, government-run health care systems built on rationing, delayed access and limited treatment options.

In his 2020 State of the Union address, Mr. Trump promised that his administration “will never let socialism destroy American health care.” In his 2026 address, Citizens Against Government Waste urges Mr. Trump to remain true to that commitment and call for the withdrawal of the Center for Medicare and Medicaid Innovation’s misguided proposals. Indeed, eliminating the entire program would be an even better idea.

Taxpayers have much to look forward to as the administration and Congress continue to work on reducing the size, scope and power of the federal government. By adopting long-standing recommendations such as reducing improper payments and eliminating the Center for Medicare and Medicaid Innovation, dreary deficit and debt growth estimates can be more hopeful and the state of the union can be even brighter.

• Tom Schatz is president of Citizens Against Government Waste.