When politicians need to find ways to save money they’ll often point to the age-old argument of reducing fraud and abuse in government programs.
Just last month, for example, a bipartisan group of Congressional House and Senate members proposed new legislation aimed at cutting billions of dollars of “waste, fraud, and abuse,” from Medicare and Medicaid, two government programs often considered fraught with largesse.
No doubt, targeting wasteful government spending is good politics; it makes economic sense too, saving taxpayers money to put toward more productive means.
Problem is politicians rarely do what’s necessary to eradicate fraud and abuse. They’ll stand on their soap boxes to complain, but typically not provide the resources or a plan of action to fix it. This is where Connecticut deserves some credit. For years advocates like the Connecticut Business & Industry Association raised red flags about fraud and abuse within the state’s $1.6 billion unemployment insurance program, arguing people who didn’t qualify or had a job, were collecting benefits.
The unemployment insurance trust fund went belly up in 2009 as the state’s jobless rate soared, forcing Connecticut to borrow hundreds of millions of dollars from the federal government. Employers are now paying that back with interest, adding to their cost burden.
As HBJ News Editor Gregory Seay writes this week, state and federal authorities are finally responding with real action. For the first time in Connecticut history, a criminal crackdown on people fraudulently collecting unemployment benefits is underway between the state Department of Labor and Chief State’s Attorney Kevin Kane.
Using grant money from the federal government, the state labor department paid for two extra investigators and a prosecutor to pursue fraudsters who last year cost the insurance pool $32 million. In the last two years, the more aggressive recovery tactics hepled the labor department recover annually $4 million in overpayments, up from $1 million previously. Since January, the state recovered $10 million in overpayments. Authorities have also made at least 15 arrests for thefts totaling $292,446.81.
Connecticut’s aggressive targeting of fraudsters will save employers money and serve as a deterrent to others thinking about bilking the system. These efforts should be applauded by the business community. Still, plenty more can be done.
Large companies often become successful by sharing best practices across departments. It’s one of the first lessons taught in business school. Connecticut needs to extend its crackdown on fraud and abuse to other programs, like food stamps. A recent analysis by the Journal Inquirer found the number of Connecticut residents on food stamps grew by 50 percent since Gov. Dannel P. Malloy took office, with an additional 56,700 people receiving government assistance.
About 395,000 residents were on the state’s food stamp rolls as of May 2013.
No doubt the state’s slow economic recovery is largely to blame for more residents needing government assistance. And we aren’t advocating a shredding of the social safety net. It is a moral imperative we all share to extend a helping hand to individuals who truly need it.
But, like politicians have long argued, large government programs open themselves up to abuse. And the state should do everything in its power to crackdown on fraudsters, who threaten the long-term vitality of important programs by draining scarce resources.
