February 23,2022

Administration Should Let States Recover Fraudulent Payments

As criminals and fraudsters line their pockets with taxpayer funds, Administration ignores $80 billion and counting in fraud

Washington, D.C.--While the White House estimates an alarming 19 percent of total COVID unemployment insurance payments were improperly paid--over $80 billion in taxpayer funds--new measures by the Biden Administration may worsen the problem. 

In a letter to the U.S. Department of Labor Secretary Martin Walsh, top Senate and House Republicans are urging the Department of Labor (DOL) to hold off on reckless new guidance that would allow states to forgo recovery of overpayments in pandemic unemployment programs, as well as to justify the legality of such a move: 

“Allowing use of blanket waivers would let states off the hook for due diligence and fact finding for large volumes of suspicious unemployment claims potentially involving billions of fraudulently obtained taxpayer dollars… 

“ETA’s action is particularly reckless in light of White House estimates of improper payments in the Federal-State UI program of an astounding 19 percent equating to an estimated $78 billion fiscal year 2021.” 

The letter is signed by Senate Finance Committee Ranking Member Mike Crapo (R-Idaho), Senate Health, Education, Labor and Pensions Committee Ranking Member Richard Burr (R-North Carolina), Senate Homeland Security and Governmental Affairs Ranking Member Rob Portman (R-Ohio), House Ways and Means Republican Leader Kevin Brady (R-Texas), and House Oversight and Reform Republican Leader James Comer (R-Kentucky). 

Members also sent a letter to the Labor Department’s Inspector General asking how blanket waivers of overpayments could impact ongoing unemployment fraud investigations.    

The Members wrote: 

Program integrity cannot be sacrificed for expediency. In fact, the Government Accountability Office estimated that $87.3 billion in CARES Act unemployment insurance funds, about 10 percent of all CARES Act unemployment insurance funds, could have been paid improperly.” 

“Given the OIG’s work ensuring the recovery of taxpayer dollars, we would like to understand how your work will continue after the UIPL, and in particular any impact on your ability to initiate and conduct investigation and prosecution of fraudulent activity in pandemic unemployment programs.” 

CLICK HERE to read the full letter to the DOL.

CLICK HERE to read the letter to the DOL-OIG.