More Careless Government Spending: Billions Delivered to Contractors that Didn’t Pay Taxes

Ericka Andersen /

President Obama has some explaining to do. The Government Accountability Office (GAO) yesterday revealed that 3,700 federal contractors — who were recipients of $24 billion dollars in stimulus funds — are tax evaders.

In total, they owed the government at least $757 million dollars – probably more since the IRS databases don’t include those who didn’t file taxes or haven’t yet been assessed. And it goes even further than that. The Washington Times reports:

The government investigators took a closer look at 15 stimulus recipients whose histories raised red flags. The 15 were responsible for $40 million in unpaid taxes, and had all engaged in potentially criminal activities, including withholding payroll taxes from employees but never sending the money to the IRS.

Senator Tom Coburn (R-OK), who was one of several Members of Congress to request the report, said, “That $24 billion went to such people looks like we are rewarding people for potentially criminal behavior.”

America is clearly lacking critical oversight when it comes to the huge dollar amounts being spent. When many Americans are struggling to make ends meet, misspent multi-billions just isn’t acceptable.

The 2009 stimulus package was a great sell for President Obama. It was full of hope for recovery and rife with the promise of jobs, jobs, jobs. What a disappointment the nearly $800 billion legislation has been for American workers and the economy as a whole.

The funding glamorized government overspending as a method for economic recovery while plunging us into a record $14.3 trillion dollars of debt – with nearly half of that being owed to foreign countries. Last year, the unemployment rate reached 10% and it remains around 9% today.

Heritage’s Brian Reidl found that in 2011, Washington will spend $32,137 per household — the highest level in American history (adjusted for inflation). Each household will have a $13,841 deficit, which will be tacked on to the bill delivered to America’s grandchildren.

As Reidl writes, “Taxpayers – and the next generation that will be paying nearly half of the bill – must decide for themselves if they’re getting their money’s worth.”

Another GAO study earlier this year discovered at least $100 billion dollars being wasted on government spending for duplicative federal programs. With all these billions being doled out so carelessly, it’s no wonder Americans have trouble trusting big government to use their money wisely.

After this report was released in March, Senator Tom Coburn (R-OK) said:

This report confirms what most Americans assume about their government. We are spending trillions of dollars every year and nobody knows what we are doing. The executive branch doesn’t know. The congressional branch doesn’t know. Nobody knows.

Sounds like things haven’t changed much since then. One can only wonder what the GAO will report next.