Campaign to Cut Waste in Action: $2 Billion Saved

Ed note: this article has been cross-posted from the OMB blog

When he launched the Campaign to Cut Waste in June, President Obama asked the Vice President to take on a new role holding the Cabinet accountable for cutting waste in their agencies to help make government more efficient and responsive to the American people. As a part of that effort, the Vice President today convened the first Cabinet waste reduction meeting and announced over $2 billion in anti-waste measures.

In these challenging budgetary times, ensuring that every agency is rooting out waste and saving taxpayer dollars is more important than ever. We have made great strides in the last two years – shrinking contract spending for the first time in 13 years, identifying $3 billion in cost reductions from IT projects across government, and getting rid of property we no longer need and working aggressively to realize the President’s goal of saving $3 billion in real estate costs by the year 2012 – but we must continue to be vigilant and innovative about driving efficiency. That’s why the President and Vice President have made the Campaign to Cut Waste an Administration-wide priority.

Joined by agency leaders from across the government, the Vice President announced a new initiative to fight waste in health care, unveiled efforts to track state progress in reducing improper Unemployment Insurance payments, and directed Cabinet Secretaries to undertake waste and efficiency reviews that will target unnecessary, wasteful, and inefficient federal spending.

The Vice President and Health and Human Services (HHS) Secretary Kathleen Sebelius discussed a new initiative to fight waste and fraud in Medicaid. HHS today released its final rule for the Medicaid Recovery Audit Contractor Program, a waste-cutting program created by the Affordable Care Act that’s projected to save $2.1 billion over the next five years – $900 million of which will be returned to states. The new program is based on the successful Medicare Recovery Audit Contractor program, which the Vice President announced has already recovered nearly $670 million to date in 2011 – increasing the taxpayer dollars recovered by nearly 800% compared to 2010.

Secretary of Labor Hilda Solis joined with the Vice President to discuss new Labor Department plans to reduce improper Unemployment Insurance payments by strengthening accountability for states. These efforts include launching a new transparency initiative to show where states stand on improper payments, working with high priority states to develop comprehensive turnaround plans to reduce improper payments, and awarding grants to states to implement waste-cutting initiatives and improve the Unemployment Insurance program.

As part of the Administration’s efforts to cut wasteful and inefficient spending, the Vice President also asked today’s meeting attendees to report back on wasteful spending practices at each of their agencies.  He praised Secretary Napolitano and cited the Department of Homeland Security’s Efficiency Review as a model effort, and called on every Cabinet Secretary to be personally involved and invested in these reviews.

By holding these regular cabinet meetings, the Vice President is making clear that each member of the Cabinet is going to be held accountable for both the dollars they spend and making government work more efficiently. Jeff Zients, Deputy Director for Management and Chief Performance Officer, and I are committed to partnering with the agencies as they redouble their efforts.