Uncovering the Greatest Theft of Taxpayer Dollars: New Estimate of $191 Billion in Pandemic Unemployment Benefits Improperly Paid

The Department of Labor's Office of Inspector General has released an updated estimate that at least $191 billion in pandemic unemployment benefits may have been inappropriately paid, with a “significant portion” attributed to fraud.^[0] This estimate was released as part of a House Ways and Means Committee hearing entitled, “The Greatest Theft of Taxpayer Dollars — Unchecked Unemployment Fraud.”^[1] The panel, chaired by Republican Rep. Jason Smith (Mo.), is attempting to discover the extent of the damage wrought by fraudulent claims.^[2]

Previous estimates from the Office of Inspector General had pegged the amount of questionable payments at around $163 billion.^[3] The Labor Department now believes a larger share of unemployment insurance benefits were improperly paid than its previous calculations — 21.5 percent versus 18.7 percent of the total last year — accounting for the upward shift in the estimated amount lost to waste and fraud.^[3]

Due to the shared responsibility of both state and federal governments in administering the unemployment system, it has been particularly vulnerable, with a combination of different regulations and – in a number of states – outdated technology that was not prepared for the peak of the pandemic. The antiquated technology and collaboration between state and federal governments enabled the already strained and particularly vulnerable unemployment system to struggle with accurate allocations.

President Biden had promised in his State of the Union address last year to appoint a “Chief Pandemic Prosecutor” to oversee the problem.^[4] The Justice Department later named Kevin Chambers to the post, but he departed the job at the end of last year, and another top Justice Department official declined to testify at the hearing.^[4]

According to the Government Accountability Office (GAO), the government established four new unemployment programs in reaction to the COVID-19 pandemic, in order to assist affected workers. However, due to the rapid distribution of funds, these programs have become vulnerable to abuse.^[5] In a report last month GAO found “substantial levels of fraud and potential fraud in unemployment insurance (UI) programs during the pandemic.”^[6] The GAO stated that no single measure can accurately assess the amount of fraud in unemployment insurance programs, yet they estimated that fraud could have gone beyond $60 billion.^[6]

The Biden Administration and Congress are in the dark about the size and scope of the greatest theft of taxpayer dollars in American history, according to Rep. Smith.^[2] The new Republican majority is turning on the lights in an effort to discover the extent of the fraud.^[7]

0. “At least $191 billion in pandemic jobless benefits were improperly paid” abc7amarillo.com, 9 Feb. 2023, https://abc7amarillo.com/news/nation-world/at-least-191-billion-in-pandemic-jobless-benefits-were-improperly-paid

1. “House Ways and Means Committee Holds Hearing on Unemployment Fraud” The Epoch Times, 8 Feb. 2023, https://www.theepochtimes.com/house-ways-and-means-committee-holds-hearing-on-unemployment-fraud_5041014.html

2. “Watchdog: US May Have Misspent $191B in Pandemic Unemployment Benefits” Tasnim News Agency, 9 Feb. 2023, https://www.tasnimnews.com/en/news/2023/02/09/2851078/watchdog-us-may-have-misspent-191b-in-pandemic-unemployment-benefits

3. “Estimate of misspent Covid unemployment payments leaps to $191B” Yahoo Entertainment, 8 Feb. 2023, https://www.yahoo.com/entertainment/estimate-misspent-covid-unemployment-payments-162853939.html

4. “Federal official warns $191 billion in COVID unemployment aid may have been misspent” Stars and Stripes, 8 Feb. 2023, https://www.stripes.com/theaters/us/2023-02-08/house-hearing-covid-aid-fraud-9077233.html

5. “Watchdog: US may have misspent $191B in pandemic unemployment benefits” WJTV, 8 Feb. 2023, https://www.wjtv.com/hill-politics/watchdog-us-may-have-misspent-191b-in-pandemic-unemployment-benefits/

6. “Unemployment Insurance: DOL Needs to Address Substantial Pandemic UI Fraud and Reduce Persistent Risks” Government Accountability Office, 8 Feb. 2023, https://www.gao.gov/products/gao-23-106586

7. “Ways and Means Republicans Seek Answers on Hundreds of Billions in Fraudulent Unemployment Benefits – House …” Ways and Means Committee, 9 Feb. 2023, https://waysandmeans.house.gov/ways-and-means-republicans-seek-answers-on-hundreds-of-billions-in-fraudulent-unemployment-benefits/