The Republican-controlled House of Representatives approved legislation Wednesday designed to prevent fraudulent federal payments before they are issued, passing the Stopping Fraudulent Payments Act 218-200.

The bill, introduced by House Oversight Committee Chairman James Comer of Kentucky, targets what agencies call the “pay and chase” system, where payments are distributed before eligibility is verified. This practice has historically led to billions in losses that agencies struggle to recover.

Under the measure, federal agencies would gain new authority to pause, condition, or segment payments flagged as high-risk for fraud or error. The Treasury Department would also use tools like the Do Not Pay database to request additional review of suspicious transactions before funds are released.

The Problem Being Addressed

The Government Accountability Office estimates improper payments reached $186 billion in fiscal year 2025, a $24 billion increase from the prior year. Since 2003, cumulative improper payments have approached $3 trillion across federal programs.

The losses span taxpayer-funded initiatives including Social Security, Medicare, and welfare programs. Large sums also flow to state and local governments, creating accountability concerns across multiple levels of administration.

Legislative Support and Opposition

“Congress must take further action to stop fraud before it happens,” Comer said during House floor debate. “The Stopping Fraudulent Payments Act adds critical safeguards to ensure federal payments go to the right recipient in the right amount before funds are awarded or disbursed.”

House Budget Committee Chairman Jodey Arrington of Texas, an original cosponsor, stressed accountability. “Every dollar must be safeguarded against waste, fraud, and abuse,” he stated.

Democrats largely opposed the measure, with nearly all voting against it, though a small number crossed party lines. The bill now moves to the Senate for consideration.

Broader Government Efficiency Efforts

The legislation forms part of an 11-bill package from the Oversight Committee addressing fraud across federal programs, ranging from student aid to improper payments in various agencies. Supporters frame the effort as consistent with White House initiatives to improve government efficiency.

The bill aims to shift federal strategy from recovering fraudulent payments after the fact to preventing them before disbursement occurs. Proponents argue this approach directs limited resources toward eligible recipients while reducing losses to fraudsters.