The federal government could reduce its debt if it spent more money overseeing the programs it’s already funding, an economist said recently.

Henry J. Aaron, a senior fellow in the Economic Studies program at the Brookings Institution, wrote that the government could save billions by investing in the administration of existing programs.

“Claiming that better administration will balance the budget would be wrong. But it would help,” he wrote. “And it would stop some people from shirking their legal responsibilities and lighten the burdens of those who shoulder theirs.”

Here are three areas where he recommends the government should spend more:

Fighting improper Medicare payments and fraud
Health care providers are ripping off the government to the tune of around $60 billion a year — 10 percent of the entire budget for Medicare — by upcharging and billing for services they never provide, Aaron said.

“Medicare tries to root out these improper payments, but it lacks sufficient staff to do the job. What it does spend on ‘program integrity’ yields an estimated $14.40 for each dollar spent, about $10 billion a year in total. That number counts only directly measurable savings, such as recoveries and claim denials. A full reckoning of savings would add in the hard-to-measure ‘policeman on the beat’ effect that discourages violations by would-be cheats.”

Tax collection

The federal government is expected to have a deficit of $468 billion this year. Meanwhile, taxpayers owe Uncle Sam $540 billion in unpaid taxes, Aaron said, citing the Congressional Budget Office.

If the government spent more money on tax collection — and streamlined tax laws — it could reduce the gap between those two numbers.

But until that glorious day when Congress finds the wit and will to make the tax system simpler and fairer, it would behoove a nation trying to make ends meet to spend $2 billion to $3 billion more each year to directly collect $10 billion to 15 billion a year more of legally owed taxes and, almost certainly, raise far more than that by frightening borderline scoff-laws.

Reviewing disability insurance claims
The Social Security Administration is supposed to reevaluate an existing disability insurance claim when it thinks that someone might be ready for work again, but because of a lack of funding, it has a backlog of 1.3 million reviews. Thirteen million people in 2013 got $161 billion in such aid, he Aaron said.

Current estimates indicate that spending a little over $1 billion a year more on such reviews over the next decade would save $43 billion. Rather than giving Social Security the staff and spending authority to work down this backlog and realize those savings, Congress has been cutting the agency’s administrative budget and sequestration threatens further cuts.

Dan MacLeod

Dan MacLeod is the managing editor of the Bangor Daily News. He's an Orland native who moved to Portland in 2002 and now lives in Unity. He's been a journalist since 2008, and previously worked for the...