This April, millions of Texans sat down at the kitchen table, gathered their W-2s and 1099s, and sent a check to Washington. A few weeks later, the federal government delivered the receipt. Across the federal government, agencies made an estimated $186 billion in improper payments during fiscal year 2025, according to the Government Accountability Office — a $24 billion jump from the year before. Spread across roughly 132 million American households, that is about $1,240 per family sent to the wrong person, in the wrong amount, or with no paperwork to justify it.
Texas has about 10.5 million households, according to the U.S. Census Bureau. Texans pay federal taxes like everyone else, which means our share of that $186 billion is real money — money that came out of paychecks earned in Houston, Dallas, Lubbock, and the Rio Grande Valley. Here are 10 of the ways the federal government spent your tax dollars this year, drawn from audits, indictments, and oversight findings on the public record.
1. $153 billion in overpayments nobody clawed back
Of the $186 billion the GAO flagged, roughly $153 billion were classified as overpayments — money the government sent that it did not owe, or sent to people who should not have received it. GAO’s Acting Comptroller General called the figure “a significant loss to taxpayers” in the agency’s official press release. Recovery rates on federal overpayments have historically run in the single digits, which means most of that money is gone for good. For a Texas family that just wrote a tax check, that is the part that stings.
2. Billions in Medicaid checks sent during a paperwork pileup
Medicaid was the single largest contributor to the improper-payment total. When the COVID-19 public health emergency ended, states had to recheck eligibility for millions of enrollees who had stayed on the rolls under continuous-coverage rules. According to the CMS fiscal year 2025 improper payments fact sheet, provider-screening gaps and outdated records produced a wave of payments to people who no longer qualified. Texas runs one of the largest Medicaid programs in the country through the Texas Health and Human Services Commission, so the unwinding touched a large number of Texas households directly.
3. Benefits paid to dead people, again
GAO’s government-wide review again found that agencies paid benefits to deceased individuals because they failed to cross-check payment rolls against the Social Security Administration’s death records. Congress has passed multiple laws requiring agencies to use the SSA’s Death Master File before issuing payments, and many still do not do so consistently. GAO has flagged this problem in reports going back more than a decade. The FY2025 amount tied to deceased recipients is not broken out separately, but the fact that it persists after years of explicit mandates is its own finding.
4. An airman accused of buying luxury cars with Pentagon funds
A Tucson-based airman and his spouse were indicted for allegedly defrauding the Department of Defense of millions of dollars, according to IRS Criminal Investigation. Prosecutors allege the couple used shell companies and falsified invoices to siphon funds through military procurement, with proceeds going toward luxury vehicles and a home. Both defendants are presumed innocent and have not been convicted. Texas hosts a large defense footprint — Fort Cavazos, Joint Base San Antonio, and several major Air Force installations — so procurement controls are not an abstract concern here.
5. A VA employee who charged $198,000 in electronics
A former Department of Veterans Affairs employee in northern Ohio was sentenced to prison after running up $198,183.84 in unauthorized purchases on a government-issued purchase card, primarily consumer electronics intended for resale, according to the U.S. Attorney’s Office for the Northern District of Ohio. GAO has separately noted that purchase-card oversight varies widely across agencies, with some lacking even basic transaction-level review. Texas is home to one of the largest veteran populations in the nation, and the same VA dollars fund care at facilities across the state.
6. Unemployment insurance fraud still echoing from the pandemic
Unemployment insurance has been on GAO’s improper-payment watch list for years. The pandemic-era explosion of UI fraud, which the Department of Labor’s Inspector General has estimated at more than $100 billion across fiscal years 2020 through 2023, is still being recovered. In Texas, jobless benefits run through the Texas Workforce Commission, which spent much of the recovery period chasing fraudulent claims filed with stolen identities — work that pulls staff away from legitimate claimants.
7. Improper payments inside the earned income tax credit
The IRS itself reports elevated improper-payment rates in refundable credits such as the Earned Income Tax Credit, a program many working Texas families rely on. The IRS attributes much of this to the program’s complexity rather than fraud — eligibility turns on income, filing status, and qualifying children, and honest mistakes are common. The lesson for Texas filers is practical: claim what you are owed, but keep your records, because the same complexity that drives the error rate can trigger a notice.
8. Contracts awarded without competition
Federal law generally requires competitive bidding, with documented exceptions. Watchdogs and Inspectors General routinely flag sole-source and no-bid awards where the written justification is thin or missing. These deals are not automatically improper, but they remove the price discipline that competition provides. Texas firms win and lose federal contracts every quarter; you can look up awards in your own county on USAspending.gov, the government’s official spending database.
9. Programs Congress keeps funding without measuring
GAO maintains a recurring list of federal programs with weak performance data — money that flows year after year without a clear measure of whether it works. The agency’s duplication and cost-savings reports have identified tens of billions in potential savings from overlapping or fragmented programs. For Texas taxpayers, the issue is not just waste in a single year but the compounding cost of programs that are never evaluated.
10. The interest on what we already borrowed
The quietest expenditure of all is interest on the national debt. As older Treasury securities mature and are refinanced at today’s higher rates, the annual interest bill has surged past what the government spends on national defense, according to Treasury’s fiscal data. Every Texas household carries a share of that, and unlike the items above, it is not a mistake — it is the bill for past decisions, paid before a single new program is funded.
Checking the $153 billion yourself, county by county
None of this requires taking GAO’s word for it, or ours. USAspending.gov lets a reader search federal awards by Texas county and ZIP code, so a taxpayer in Lubbock or Laredo can see which agencies and contractors actually drew on federal funds locally, not just the national total. The Texas State Auditor’s Office publishes its own audits of state programs that handle federal pass-through dollars — Medicaid, unemployment insurance, and disaster funds among them — and those reports name the specific programs where Texas found problems, not just where Washington did. GAO’s improper-payment reports are free, updated annually, and each one lists the individual agencies driving the total, so next year’s $186 billion — or whatever it becomes — can be traced back to the same ten categories rather than treated as a single unexplained number.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
