The bill creates a "Do Not Pay" list, a database of entities that are not eligible to receive federal payments. Federal agencies would have to closely monitor that list and use it to cross-check whether the entity they are about to pay is eligible.

Rep. Jason ChaffetzJason ChaffetzChaplain controversy shifts spotlight to rising GOP star Ingraham’s ratings spike a wake-up for advertisers Boehner to campaign for House GOP candidates MORE (R-Utah) praised the bill as a chance to reduce the estimated $108 billion in improper payments that the government made in the last fiscal year alone.

"Here we are fighting for fiscal sanity in this country, and we have $108 billion estimated in improper payments," he said. Chaffetz added that significant money was wasted sending out benefit checks to people who are no longer living.

"Last year the Inspector General of Office of Personnel Management found that federal retirement disability benefits totaling $600 million were paid out to deceased individuals over a five-year period," he said.

The bill was sponsored by Rep. Edolphus Towns (D-N.Y.); he and other Democrats also welcomed the bill as a way to curb waste, fraud and abuse.

"This bill will increase transparency while eliminating and recovering these improper payments through the creation of the government-wide do not pay list," Rep. Jason Altmire (D-Pa.) said.