Pandemic Fraud Gone Wild

Latest estimate of theft from jobless insurance programs: $60 billion.

By The Editorial Board

Updated Jan. 25, 2023 6:35 pm ET

Government spending and fraud are regular dance partners, but rarely as cheek to cheek as they were with unemployment payments during the pandemic. A new report adds more evidence about the failure to protect taxpayers.

The Government Accountability Office this week released a review of the Labor Department’s handling of $878 billion in unemployment insurance handouts from April 2020 to September 2022. Labor estimates that fraud in its normal unemployment program hit $8.5 billion from July 2020 through June 2021. That’s 8.6% of outlays.

GAO extrapolated the lower bound of this fraud rate (7.6%) across the three additional unemployment programs Congress created for the pandemic, and it estimates taxpayers overall underwrote some $60 billion in fraudulent payments. This buttresses last year’s Labor Department Inspector General estimate of at least $45 billion in fraud. As GAO notes, Congress’s “unprecedented infusion of federal Covid-19 relief funds into UI programs during the pandemic

gave individuals and organized crime groups a high value target to exploit.”

Take the Pandemic Unemployment Assistance program, designed to help self-employed workers and independent contractors. Congress was so eager to hand out cash that for most of 2020 it allowed applicants to “self certify” their eligibility—requiring no documentation of self-employment.

The program predictably ballooned, comprising over 40% of the more than 3.2 million unemployment claims submitted the week ending May 23, 2020. GAO reports that “the increased amount of benefits awarded and the PUA program’s initial reliance on self-certification” inspired a rash of swindlers.

Thousands cheated the system by falsifying information on income or employment. GAO relates one case in which a former state workforce agency employee used pilfered information to submit at least 197 fraudulent applications. Another individual collaborated with prison inmates to bilk $180,000, and one thief stole identities to submit at least 300 claims in 17 states and territories.

The government excuse is that it was erring on the side of getting people aid quickly. Yet any Member of Congress who has read a government watchdog report knows the Labor Department has struggled with chronic unemployment fraud, reporting billions annually in improper payments before Covid. The structure of these pandemic-era programs was an invitation for hoaxers to descend.

GAO reports that while Labor has recently handed out nearly $900 million in grants to state agencies to address fraud, the department itself still hasn’t adopted practices recommended by GAO as long ago as 2015. This follows numerous IG reports that have scored Labor’s refusal to get tougher with states that are lax on fraud.

Democrats in the last Congress covered for these failures and blocked legislation designed to track funds and fix certain practices. House Oversight Chairman James Comer is now getting serious, and next week he’ll hold his first hearing into the waste and fraud in Covid relief programs. Americans deserve to know what went wrong and what Congress is doing to prevent a repeat.

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Again: “GAO reports that while Labor has recently handed out nearly $900 million in grants to state agencies to address fraud, the department itself still hasn’t adopted practices recommended by GAO as long ago as 2015. This follows numerous IG reports that have scored Labor’s refusal to get tougher with states that are lax on fraud.”

America needs a comprehensive economic initiative that delivers direct, tangible benefits to America’s honest, hard-working, tax-paying U.S. citizens – rather than continuing with their grossly mismanaged, fraud-ridden big government social assistance boondoggles.

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Social Security, Medicare Cuts Sidelined in Debt-Ceiling Talks – WSJ

Programs face future funding shortfalls but remain politically perilous to both parties

The Wall Street Journal, Feb 2, 2023 – Excerpts:

WASHINGTON—Republicans are backing away from proposals to reduce spending on Social Security and Medicare as they enter talks with Democrats over raising the nation’s borrowing limit, sidelining for now a politically perilous fight over how to best firm up the finances of the popular benefit programs.

The partisan wrangling underscores the difficulty of finding a legislative solution to the stark long-term financial challenges facing both programs, which provide retirement and healthcare benefits to seniors. Overhauling Social Security and Medicare carries such risk—for Democrats who favor raising taxes and for Republicans eyeing cuts to future benefits—that it has become known as the third rail of American politics, threatening to zap any politician who tries to touch it.

One notorious 2012 TV commercial showed a man who looked like then-Vice Presidential candidate Paul Ryan pushing grandma off a cliff in a wheelchair—after the Wisconsin Republican proposed Medicare changes….

Some Republicans say they would shrink deficits by giving priority to cuts to discretionary military and nonmilitary spending. But such an approach could limit Republicans’ ability to make the deep reductions many seek. As much as 92% of projected nominal spending growth is driven by Social Security, federal healthcare programs and interest payments on the national debt, according to the nonpartisan Committee for a Responsible Federal Budget.

Trustees for the Social Security Trust Funds projected last year that the program’s combined reserves would be depleted in 2035. Once Social Security’s reserves run out, revenue would pay for roughly 80% of scheduled benefits, unless Congress steps in.

Reserves for Medicare’s hospital-insurance fund are forecast to run out in 2028, at which point the program would only be able to pay about 90% of hospital coverage.

Rep. Byron Donalds (R., Fla.) said that while Social Security and Medicare are off the table for the debt-ceiling talks, that doesn’t mean that Republicans won’t propose changes down the road.

“When it comes to the debt ceiling, nobody is talking about Social Security and Medicare, nobody. Full stop,” Mr. Donalds said. “Now, for the longer-term fiscal outlook of the country, there are reforms that are going to have to be made in those programs,” he said.

Currently, Social Security taxes aren’t collected on an individual’s wages over $160,200. 

To address Medicare insolvency, some Senate Democrats have considered a tax increase on high earners.

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Washington Democrats are spinning America ever deeper into the great debt void and eventual collapse of the Dollar.

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How to Play ‘Debt-Ceiling Chicken’ – WSJ

Republicans will be emboldened to push past deadline, but history shows politics are against them

The Wall Street Journal, Feb. 1, 2023 – Excerpts:

The fight over the debt ceiling is usually described as a game of chicken. In the current version, congressional Republicans and the Biden administration each want the other to blink first and avoid a convulsive default on federal government debt.

Actually, it is two separate games of chicken with very different dynamics. The first runs until the “X-date,” when debt hits the $31.4 trillion limit, and the Treasury Department has no more room to borrow and thus pay all the government’s bills. In this game, Republicans have the upper hand. The second game begins after the X-date, and then the advantage switches decisively to the White House.

…..

Mr. Biden is adopting much the same stance then-President Barack Obama did in 2011, when the U.S. came close to, but didn’t pass, the X-date. The Biden administration says raising the debt ceiling simply allows Treasury to pay obligations Congress has already agreed to, and should be done without conditions. Biden officials say they cannot “prioritize” debt payments—use incoming revenue to pay interest on the national debt, thereby avoiding a debt default, while defaulting on other obligations, from Social Security and Medicare payments to military salaries and supplies.

…..

In this game of chicken, Mr. Biden and Republicans will try to pin the blame on each other. History is solidly on Mr. Biden’s side. In the government shutdowns of 1995-96, 2013 and 2019, and the debt ceiling impasse of 2011, polls showed the public always blamed Republicans more than Democrats. This has had real-world repercussions: it helped re-elect President Bill Clinton in 1996 and cost the GOP the Virginia governor’s race in 2013.

Former and current Republican officials I spoke to for this column all said their party will lose this political game of chicken, like they lost the others. “The media and Biden will do a better job of blaming us.…

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Republicans will lose this game of chicken… and America will be all the worse for it.

The Leviticus 25 Plan will eliminate massive amounts of public/private debt, rejuvenate free-market economics, reduce dependence on government, restore economic liberty.

Its popular appeal will win millions of new votes.  And produce landslide election wins.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5684 downloads)