GAO report: At least $1.4 billion of Obama’s stimulus went to tax cheats

posted at 12:01 pm on June 27, 2012 by Erika Johnsen

I wish I could summon the energy it takes to be outraged, but at this point I’m so jaded by the endemic inefficiency, ineptitude, and downright corruption of the federal government, it would take a lot more to surprise me these days. How sad is that?

At the start of his term, one of President Obama’s ostensible goals for the $800 billion-strong Recovery Act was to strengthen the economic recovery by providing some cushion in the housing market. (Of course, he proclaimed, there would be mechanisms in place to prevent the possible abuse of his economic largesse.) Within the stimulus act’s provisions was a first-time homebuyer tax credit and mortgage assistance, which granted the Federal Housing Administration the authority to insure loans at a higher rate in high-cost housing markets. Applicants who were delinquent on their federal taxes weren’t supposed to be eligible to receive the FHA’s stimulus-assistance, but — gasp — the FHA didn’t really have a system in place to obtain that information.

The result? The federal government doled out almost $1.5 billion in tax credits and government-backed mortgage loans to tax cheats, according to a GAO audit released Wednesday.

Under government rules, delinquent taxpayers are supposed to be ineligible for the mortgage insurance program unless they have reached a repayment agreement with the Internal Revenue Service. But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.

That meant FHA insured $1.4 billion in mortgages for 6,327 borrowers who collectively owed $77.6 million in unpaid taxes, or an average of more than $12,000 each.

The auditors said that as a category, the tax cheats had foreclosure rates up to three times as high as other borrowers, which meant the delinquent taxpayers exposed the government to even greater risks. …

“The stimulus-spending program was ill-conceived, with far too little oversight,” [Sen.] Grassley said. “It shouldn’t surprise anyone, unfortunately, that tax dollars have gone to tax cheats. It’s another one of many negative consequences of writing checks without enough checks and balances.”

Whaaat? Large bureaucracies that aggressively distribute ‘free’ money are fraught with waste, fraud, and abuse? Who could’ve seen that one coming?

The federal government should absolutely not be involved in the business of making these types of loans. We already have a private sector that provides said services, and if an individual is unable to obtain a loan from a private financial firm — it’s probably because they aren’t a very safe investment. Private institutions are careful and judicious with their money, but the federal government has ‘unlimited’ taxpayer dollars at its disposal. “Hey, it’s not our money — we’ll go ahead and distribute money to people we see as deserving of these loans as far as it serves our political goals!” Yeah, that’s just a brilliant idea.

This is my precise problem with the government getting so intensely involved in financial markets and creating such august bodies as the “Consumer Financial Protection Bureau.” Really? The federal government is supposed to be able to “protect” us from those big, bad banks and financial firms? Who the heck is going to protect us from the artifices of the federal government?!


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I wish I could summon the energy it takes to be outraged, but at this point I’m so jaded by the endemic inefficiency, ineptitude, and downright corruption of the federal government, it would take a lot more to surprise me these days. How sad is that?

I feel ya — sister from another mister.

FlatFoot on June 27, 2012 at 12:05 PM

I’m like you Erika, it seems a daily news event that shows this crooked bho/team! One gets numb after a bit, but I must help everyway I can to get those two out of Our House come Nov.!

On a related note, have you seen this on fraud? Look where they think this started from?

http://news.sky.com/story/952931/fraud-ring-in-hacking-attack-on-60-banks
L

letget on June 27, 2012 at 12:09 PM

Well, at least they’ll do a better job with student loans than the private sector did /

tomg51 on June 27, 2012 at 12:12 PM

Porkulous was intended to stimulate the pocketbooks of Democrats and their clients, not the economy.

We should be surprised that tax cheats are heavily overrepresented in that population of political parasites?

novaculus on June 27, 2012 at 12:14 PM

Do as socialists say not as socialists do.

wildcat72 on June 27, 2012 at 12:15 PM

Now that is……”Shovel Ready”!!
(sarc).

canopfor on June 27, 2012 at 12:15 PM

Online Streaming Rush Limbaugh Radio Show!

770AM KTTH
The Truth

http://den-a.plr.liquidcompass.net/player/flash/audio_player.php?id=KTTHAM&uid=469
===================================

http://tunein.com/

canopfor on June 27, 2012 at 12:17 PM

It’s not a bug, it’s a feature. Half of them likely work in Obama’s cabinet.

Archivarix on June 27, 2012 at 12:18 PM

At least $1.4 billion of Obama’s stimulus went to tax cheats

…but…but…butt VP Joe Biteme promised everybody if the stimulus bill was passed…HE was going to oversee that every single dollar would be accounted for and there would NOT be any funny business!
BEND FORWARD!

KOOLAID2 on June 27, 2012 at 12:18 PM

they waste 1.5 billion before lunch each day, that’s why it’s so hard to be outraged.

gsherin on June 27, 2012 at 12:18 PM

Oh oh. Looks like someone messed with Uncle Joe.

cyclown on June 27, 2012 at 12:18 PM

We should let these people make health care decisions for all of us.

Bishop on June 27, 2012 at 12:20 PM

Er, well I think he’s doing a fine job.

crr6 on August 10, 2011 at 6:15 PM

Del Dolemonte on June 27, 2012 at 12:20 PM

Change Contempt We Can Believe In!

pilamaye on June 27, 2012 at 12:20 PM

The federal government doled out almost $1.5 billion in tax credits and government-backed mortgage loans to tax cheats

Isn’t it illegal to recycle that money back into his administration?

The Rogue Tomato on June 27, 2012 at 12:21 PM

http://news.sky.com/story/952931/fraud-ring-in-hacking-attack-on-60-banks
L

letget on June 27, 2012 at 12:09 PM

Headline says 60mil , but its 2 billion euro — so far.

The virus is still running – and in North American banks.

Check your accounts, folks.

This is HUGE!!

faraway on June 27, 2012 at 12:22 PM

I wish I could summon the energy it takes to be outraged, but at this point I’m so jaded by the endemic inefficiency, ineptitude, and downright corruption of the federal government, it would take a lot more to surprise me these days. How sad is that?

This is part of Oshifty’s plan, a lynchpin of the Alinsky way, to overwhelm us with corrupt act after corrupt act after corrupt act until our stress safety valve kicks in and we can’t muster anymore outrage and then they get the drop on us and hit us with more and more and more and even more outrageous corruption in an attempt to deaden us to the point where we don’t want to fight anymore–then they win. It’s better and more insidious than waterboarding.

As for tax cheats getting stimuslush, why shouldn’t they? Timmah the tax cheat got himself a nice cushy Cabinet position so don’t the common folk cheaters deserve to share in the spoils?

stukinIL4now on June 27, 2012 at 12:24 PM

But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.

So where the hell was “Sheriff Joe”?

GarandFan on June 27, 2012 at 12:24 PM

That meant FHA insured $1.4 billion in mortgages for 6,327 borrowers who collectively owed $77.6 million in unpaid taxes, or an average of more than $12,000 each.

Couldn’t possibly be a Dem scheme to get more people to vote for IWOn.

Nah, couldn’t be.

/

GrannyDee on June 27, 2012 at 12:25 PM

Just think what these pigs are gonna be like, when they start doling out healthcare – especially when you are no longer useful to the State.

Oh! And, in Utopia, the very best part is – pursuant to the law creating the IPAB, its decisions are neither subject to administrative review, nor judicial appeal.

Utopia is gonna be a beautiful thing.

OhEssYouCowboys on June 27, 2012 at 12:30 PM

Obama, on a scale of 1-10, how smart do you think you are?

Or, to be more precise, on a scale of 1-10, what is your IQ?

The Rogue Tomato on June 27, 2012 at 12:41 PM

Gee, why was it I wanted him to fail?

Bmore on June 27, 2012 at 12:41 PM

How else are bundlers going to be repaid for their generosity? There aren’t enough ambassadorships to Paris to go around!

slickwillie2001 on June 27, 2012 at 12:41 PM

faraway on June 27, 2012 at 12:22 PM

Fer sure, but there isn’t anything we can do, is there ?

pambi on June 27, 2012 at 12:45 PM

“Of Course . . . ”

Translation: “Reach for your wallet. .”

TimBuk3 on June 27, 2012 at 1:15 PM

Online Streaming Rush Limbaugh Radio Show!
770AM KTTH
The Truth
http://den-a.plr.liquidcompass.net/player/flash/audio_player.php?id=KTTHAM&uid=469
===================================
http://tunein.com/

canopfor on June 27, 2012 at 12:17 PM

I downloaded this app yesterday. It is an incredible app. Way better than I Heart Radio app.

karenhasfreedom on June 27, 2012 at 1:23 PM

Biden was going to oversee every penny but he’s still trying to figure out the website number.

Buttercup on June 27, 2012 at 1:30 PM

And which party do the majority of these TAX CHEATS belong to….

The d-cRAT socialists love to tax us to death, then tax our death, and have repeatedly shown that they will raise every tax and impose every fee that they can dream up to get them more money to fund their ideological perversions for a massive BIG GOVERNMENT nanny state. But, like lunatic-left d-cRAT socialist TAX CHEATS geithner, rangel, daschle, olbermann, killifer, buffett, solis, kirk, mccaskill, sebelius, holder, kerry and millions more, they hate to pay taxes for this waste, and they’ll cheat the government out of every penny they can.

TeaPartyNation on June 27, 2012 at 1:55 PM

But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.

The GAO is racist!

- lamebrain4life

Flora Duh on June 27, 2012 at 1:57 PM

Whaaat? Large bureaucracies that aggressively distribute ‘free’ money are fraught with waste, fraud, and abuse? Who could’ve seen that one coming?

Not anyone on the Left, apparently. They only screech for more, more, more. As long as they enact policies that allow themselves to pat themselves on the back, results are irrelevant.

visions on June 27, 2012 at 2:17 PM

Whaaat? Large bureaucracies that aggressively distribute ‘free’ money are fraught with waste, fraud, and abuse? Who could’ve seen that one coming?

Really? The federal government is supposed to be able to “protect” us from those big, bad banks and financial firms? Who the heck is going to protect us from the artifices of the federal government?!

I’m liking Erika’s writing. The high level of sarcasm is very entertaining. :)

gravityman on June 27, 2012 at 3:46 PM

Hope Obamacare is struck down tomorrow or the IRS will hire those 5,000 agents it wants to enforce the mandate. H!ll, they should hire them to get after these tax dodgers and cheats!!!

Bob in VA on June 27, 2012 at 3:47 PM

Hope Obamacare is struck down tomorrow or the IRS will hire those 5,000 agents it wants to enforce the mandate. H!ll, they should hire them to get after these tax dodgers and cheats!!!

Bob in VA on June 27, 2012 at 3:47 PM

They are likely mostly hired. When the case went to the Supreme Court, Sebelius went balls-to-the-wall full speed hiring and writing regulations.

Maybe they can be revectored to investigate SSDI and food stamp fraud.

slickwillie2001 on June 27, 2012 at 6:25 PM