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What the U.S. government is doing to fix unemployment fraud

The U.S. government is clear that unemployment fraud is a huge problem, and has budgeted $2 billion to try to fix it.

Where it stands: The Department of Labor inspector general reported last month that 20 states did not perform what was required of them in terms of detecting improper payments, and 44 states did not do what was recommended (but not required).

  • The inspector general cites an “improper payment rate” of 10.6% — but that is not an estimate of the amount of fraud that took place during the pandemic. Instead, it is a lower bound — the lowest fraud rate that was seen before the pandemic.
  • The report says that the rate during the pandemic was probably “much higher” but hazards no guesses as to just how high it was.
  • The Labor Department itself “has not estimated an improper payment rate for UI benefits provided in response to the COVID-19 pandemic,” notes the inspector general.

What they’re saying: “Widespread fraud at the state level in pandemic unemployment insurance during the previous administration is one of the most serious challenges we inherited,” said White House economist Gene Sperling in a statement provided to Axios.

  • President Joe Biden said last month: “There is perhaps no oversight issue inherited by my administration that is as serious as the exploitation of relief programs by criminal syndicates using stolen identities to steal government benefits. Last year, this type of criminal behavior robbed American families of billions of dollars.”

The other side: House Republicans Darrell Issa, James Comer, and Gary Palmer are today demanding a Congressional hearing on this issue.

  • “As much as $400 billion may have been lost to fraud by way of falsified claims for COVID-related unemployment benefits,” Palmer says in a statement provided to Axios. “Identity theft has become rampant and foreign crime rings have stolen hundreds of billions of dollars.”
  • “This is one of the greatest thefts of American tax dollars in history, totaling more than the entire 2021 budgets of the Army and Navy combined, and more than the combined budgets of eight American states. It’s beyond time for Congress to exercise more oversight of these benefit processes to ensure that Americans are never again the victims of fraud on this unacceptable scale.”

Source: on 2021-06-17 14:11:15

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