Obama Signs Law to Cut 'Improper Payments'

President Obama on Thursday signed legislation intended to slash by $50 billion the taxpayer money improperly paid to dead people, fugitives and those in jail who shouldn't be getting benefits.

But that goal, if achieved, would not even halve the $110 billion made in such payments last year.

The new law will strengthen the efforts by federal agencies to halt the flow of improper money in a series of ways. Among those steps: requiring more audits of programs and adding penalties for agencies that don't comply with the law. The legislation also broadens how any recovered money can be used.

Obama chose to sign the bill in front of cameras in the White House's State Dining Room in hopes of bringing attention to the new law. He announced a goal of reducing improper payments by $50 billion by 2012; the White House says that last year's total of nearly $110 billion in these payments was the highest ever.

The president said the ultimate to goal is to end all improper payments.

"We have to challenge a status quo that accepts billions of dollars in waste as the cost of doing business," the president said.

Bad payments range from outright fraud to checks issued to the wrong person or for the wrong amount because of a typo. The president said that every dollar wasted should be going toward helping people afford college, providing benefits to the military and many other legitimate uses of tax money.

For perspective, he said the $110 billion figure in wasted money last year was more than the budgets of the Department of Education and the Small Business Administration combined. "That's unacceptable," he said.

The bill marked the latest effort by the administration to get a tighter handle on Washington spending, a politically sensitive issue as more Americans show concern about the nation's mounting debt. The president used the opportunity to recite a series of other measures to target unneeded spending under his watch.

Last month, he ordered creation of a federal "Do Not Pay List" -- a database that agencies ultimately must search before writing checks to individuals and contractors.

Obama has proposed a three-year freeze in spending not tied to national security. He has instituted changes in how government contracts are awarded to save billions in such costs, and he has directed agencies to sell excess or underused real estate.