The Anti-Efficiency Agenda
Republicans are bad at government
I recently appeared on a stream where, after debating DEI and trans people in sports (the most important issues of our time), the conservative host and I had a few minutes to discuss the Republicans’ proposal to cut hundreds of billions of dollars from Medicaid (among other things). This conversation was emblematic of other conversations I’ve had with conservatives about the issue of waste, fraud, and abuse in welfare programs and state services.
Republicans, conservatives, and libertarians (right-wingers for the purpose of this exercise) will make a few common claims about these programs, along with suggested policies:
Governments are run inefficiently.
Government programs are filled with waste, fraud, and abuse.
Therefore, we should reduce the size and scope of these programs by cutting funding and investigating waste, fraud, and abuse.
These are standard arguments against government services and welfare programs, but these planks either miss the forest for the trees or they aren’t sound. Luckily for us, these are also empirical claims we can research.
Governments are run inefficiently
Right-wingers don’t understand why governments are inefficient when they are, and they drastically overestimate the level of inefficiency in government. This is either for bad faith reasons, or they’re misinformed.
Let’s take a step back and think about an organization with a problem. It’s a private corporation that needs its legal contracts reviewed and executed in an orderly, efficient, and timely manner. The CEO of the company discovers this isn’t happening. Contracts take several months to review, and every now and then a contract has an error or two. Because of this, the company’s business dealings slow, and revenue is either canceled, delayed, or degraded.
Upon investigation, the CEO discovers a single person manages the contract review and execution process. Entering this person’s office, the CEO notices contracts all over the place, piled high, a fresh stack on this person’s desk from the day before awaiting review. Seeing this, the CEO has two choices: (1) The CEO could cut this employee’s salary and budget for contract review and execution, or (2) the CEO could budget the company to hire one or two extra contract specialists to distribute the workload and expedite the review of contracts.
Most sensible CEOs would choose option two. Cutting the budget for contracts would likely make the backlog of contracts worse because the bottleneck is the workload itself and not fraud or incompetence in the contracts department. Another scenario—faced with the same bottleneck, the CEO enters the contracts department and sees three people sharing a desk, reviewing all contracts on paper and by hand. Seeing this, the CEO has two choices: (1) the CEO could fire one or two of the contract specialists and/or cut their meager budget, or (2) the CEO could increase their budget in order to install computers, digitalize documents, and pay for an AI assistant tool to help with reviewing contracts.
Most sensible CEOs would choose option two. Clearly, the issue is not that these employees lack the capacity to be productive. Rather, the tools available to them aren't the best, so they need better tools, which are worth investing in. Right-wingers would tend toward option one in both scenarios if we replaced 'corporation' with 'government.' This is because they don’t realize exactly why government is inefficient, nor do they offer solutions that directly solve the inefficiencies of government.
Governments are not inefficient because of rank levels of incompetence combined with overly generous taxpayer-funded budgets. Inefficiencies are often a result of a lack of investment in productive capacity and staffing. Take IRS call times as an example. The IRS is under constant attack by right-wing politicians for being a burden to the American public, harassing hard-working people, all while sitting in their ivory tower collecting taxpayer-funded checks. Therefore, as right-wingers argue, we should run a tighter ship, cut the IRS, and under this constrained budget, efficiencies will follow.
The opposite is true. The Biden administration invested in IT infrastructure and brought in thousands of extra employees. Thanks to this, calls answered soared while wait times collapsed. This is in addition to collecting an extra $1 billion in revenue from the wealthy cheating on their taxes, all thanks to additional investments from the Biden administration. This extra money spent towards staffing and infrastructure paid itself back several times over and enabled the IRS to better accomplish its goals and offer better service.
Every single CEO of every single major corporation would agree that it's important to invest in proper levels of staffing and infrastructure, but for some reason right-wingers expect the government to do more with less because they assume the government must be inefficient due to incompetence or malevolence. If society wants efficient, timely, and orderly government services, we have to invest in them. We can’t cut government budgets and expect there to be efficiency gains. Sometimes, efficiency has a cost, and sometimes that cost is additional employment and productivity-enhancing technologies.
Waste, Fraud, and Abuse
No sensible person would say government services and welfare programs have zero waste, fraud, or abuse. Any large organization (public or private) will have things like leakage or theft. However, right-wingers tend to assume the level of waste, fraud, and abuse in government services and welfare programs is both radically higher than it actually is and under investigated. If only someone, anyone, would take the time to investigate these programs, they would see just how much waste, fraud, and abuse there is! Unfortunately for right-wingers, this isn’t a new concept, nor has it been under investigated. Let’s take Medicaid as an example.
Medicaid is a public insurance option for poor people in America. Depending on the state, there are various thresholds to fall below, and if you fall below them, you qualify for Medicaid (see: Texas for example). In fiscal year 2024, the ‘improper payment’ percentage was 5.09% or $31.1 billion. 79.1% of these improper payments were due to ‘insufficient documentation.’ This often means the person or state-level agency missed administrative steps that are technically required, but these payments are not the type of abuse or fraud where individuals who do not rightly or reasonably qualify for Medicaid receive payments anyway. This means the more definitive fraud or abuse rate for Medicaid payments was around 1% of total Medicaid dollars spent.
For reference, corporations lose about 5% of their revenue from leakage associated with billing errors, contract issues, theft, etc. It is neither unusual nor unexpected that a large institution will have some level of waste, fraud, and abuse. Having a trivial level of waste, fraud, and abuse does not mean an institution is poorly run or deserving of steep budget cuts. Over 70 million Americans access healthcare through Medicaid alone, so when right-wingers argue for 5%, 10%, or 50% cuts in Medicaid in order to save the few percentage points of fraudulent payments, there is no better example of cutting off one’s nose to spite one’s face. Either that, or they use a 1% fraud rate as cover for their real goal: cutting services to the poor.
Lastly, one of the reasons why the fraud rates in Medicaid are low is that the government isn’t completely incompetent. There is an understanding, at every level of government, that government services and welfare programs are susceptible to fraud. The Office of the Inspector General in federal agencies is tasked with investigating its respective agencies for illegal activity, fraud, and/or abuse. The Department of Health and Human Services has an Inspector General to serve this function for health programs, including Medicaid.
Part of Medicaid’s external checks are ‘Medicaid Fraud Control Units’ in all 50 states, D.C., Puerto Rico, and the U.S. Virgin Islands. This is in addition to regular reporting requirements, state-level enforcement actions, and democratic accountability. There are also the ‘Centers for Medicare & Medicaid Services’ which are responsible, in part, for investigating and recovering improper payments. The U.S. doesn’t need the ‘Department of Government Efficiency’, partly because the Office of the Inspector General exists in an array of government institutions from the local to federal level. Internal checks already exist. These programs are transparent, and the level of waste, fraud, and abuse is already very low.
It’s also worth noting that the means-testing of these programs (a significant portion of the documentation requirements) is a meaningful portion of the reason why these programs have so many benefit gaps and ‘improper payments.’ A truly efficient welfare system would be highly universal, without much in way of means testing. This reduces the number of government bureaucrats collecting checks while providing better public-facing services. Although, you’d typically only find such a suggestion in left-wing spaces.
Cutting government spending
Using Medicaid as an example should illustrate some of the fundamental problems with right-wing logic on government efficiency. Democracies tend to run public services quite well in aggregate. The real constraints of efficient government in the U.S. are staffing, investment, and poor program design. There already exists a robust system of investigating fraud, waste, and abuse. We can and should do more in all three of these regards, but finally, that brings me to the often-suggested right-wing solution to government inefficiency or waste—cut government spending.
The above should give sufficient reason to, at least, be skeptical of right-wing calls for funding cuts, but I’ll end with one final argument: cutting spending doesn’t cut waste, fraud, or abuse. Say the Medicaid system had a huge problem with waste, fraud, and abuse, would cutting the budget of Medicaid by 10% eliminate this problem? Why would it? It could have the opposite effect. When government services face thinner budgets overtime, the exact offices responsible for uncovering abuse face the same cuts. Even if these specific offices aren’t affected, the internal staff of these organizations are affected.
A budget cut means fewer people hired to review and process claims, less investment in technology to boost productivity, and therefore, fewer people receiving the affordable care they so desperately need. A right-winger saying they want to cut a budget to address waste, fraud, and abuse makes about as much sense as a CEO saying cutting the contracts department’s budget causes the department to be more efficient. It makes no sense whatsoever.
Public services and welfare programs are good, and they require investment. Many right-wing people are amenable to a basic system of social insurance. However, right-wing politicians mask their true goals (cutting services) behind more noble ones (addressing inefficiencies and waste). In addition, on its face, the right-wing solution for addressing inefficiencies and waste aren’t internally sound, novel, or bore out in the best evidence we have.