Nothing left to cut? Federal lawmakers lack the imagination to live within their means.

• Author: de Rugy, Veronique
• Position: Columns - Federal budget - Column

IN SEPTEMBER 2013, as Capitol Hill was bracing for a government shutdown over fiscal disagreements, House Minority Leader Nancy Pelosi (D-Calif.) declared that the $3.7 billion federal budget had already been cut to the bone.

"The cupboard is bare. There's no more cuts to make. It's really important that people understand that," Pelosi said in an interview on CNN. "We cannot have cuts just for the sake of cuts."

Modern Democrats do not have the will to shrink the federal waistline. Sadly, modern Republicans are little better: Despite paying lip service to balanced budgets, the elephants of the Grand Old Party are too often just as gluttonous as their opponents, and averse to naming specific programs that deserve the ax.

In March 2012, for instance, GOP candidate Mitt Romney refused to get specific with The Weekly Standard. "I anticipate that there will be departments and agencies that will either be eliminated or combined with other agencies.... I think of the programs to be eliminated or to be returned to the states, and we'll see what consolidation opportunities exist as a result of those program eliminations. So will there be some that get eliminated or combined? The answer is yes, but I'm not going to give you a list right now."

But you don't have to look very far at all to uncover areas where spending can and should be cut. According to the Office of Management and Budget (OMB), the federal government misspent more than $100 billion in 2012, on things like sending hospitals reimbursements for treatments they didn't provide or overpaying them for treatments they did provide. And that figure is comprised only of mistakes the OMB managed to catch.

According to the Government Accountability Office (GAO), from 2004 to 2012 the federal government improperly allocated somewhere between $38 billion and $121 billion in taxpayer funds each year, amounting to a total $799 billion over an eight-year period. Such misallocations range from misattributed tax credits to disability insurance payments being made to non-disabled people. And the problem is getting worse: Improper payments averaged $42 billion a year from 2004 to 2007, then jumped to $105 billion between 2008 and 2012.

These pockets of waste could be squeezed out by restricting program eligibility to those who needed it most, thus keeping the list of recipients small and manageable. This in turn would make oversight more effective. Waste could also be reduced by forcing programs to recover...