House Republicans Introduce Bill to Combat Unemployment Fraud

Press Release

WASHINGTON -- U.S. Rep. Jackie Walorski (R-Ind.), the top Republican on the House Ways and Means Subcommittee on on Worker and Family Support, today joined House Republican Leader Kevin McCarthy (R-Calif.), Ways and Means Committee Republican Leader Kevin Brady (R-Texas), Rep. Michelle Steel (R-Calif.), and 13 other Ways and Means Republicans in introducing legislation to combat fraud in federal unemployment programs.

The Combatting COVID Unemployment Fraud Act of 2021 (H.R. 3268) would add protections to prevent unemployment fraud before it occurs, strengthen efforts to recover fraudulently paid benefits, and provide relief for taxpayers and victims of unemployment fraud.

"Enhanced federal unemployment benefits are not only hurting our economic recovery -- they're turning Americans into easy prey for fraudsters and criminals," Congresswoman Walorski said. "Rampant unemployment fraud has cost taxpayers as much as $200 billion and exposed countless workers and families to identity theft and financial harm. Yet Democrats refuse to hold even a single hearing on how to stop it. This commonsense bill will protect workers, families, and small businesses by adding safeguards on the front end to prevent fraud before it occurs and strengthening efforts to recover stolen funds after the fact."

"Since the pandemic began, criminals have taken advantage of Covid unemployment programs, causing fraud, waste, and abuse of taxpayer dollars," Republican Leader McCarthy said. "In my home state of California alone, widespread unemployment fraud has cost American taxpayers tens of billions of dollars. Republicans warned that COVID unemployment programs were highly vulnerable to fraud, yet almost every Democrat voted to extend these programs, without holding a single oversight investigation. We cannot let these crimes continue to go unchecked, so we are introducing this legislation that will help prevent fraud on the front end, make it easier to recuperate fraudulently paid dollars, and provide relief to victims of unemployment fraud. Congress must act now to reign in fraud and protect hardworking taxpayers."

"We are living through the greatest theft of American tax dollars in history, up to $200 billion lost to fraud--twice the amount we spend each year to take care of our veterans," Ranking Member Brady said. "Unfortunately, Democrats in Washington are ignoring this growing problem and refuse to have even a single oversight hearing. Congress has a responsibility to ensure COVID relief doesn't remain a windfall for fraudsters."

"The State of California has paid out billions in fraudulent unemployment claims, all the expense of hardworking taxpayers," Congresswoman Steel said. "Fraudsters and criminals had access to the state's money through widespread fraud, all while those in need of the program's funding waited patiently for support that never came. This is an embarrassment, and it can never happen again. That's why I teamed up with my colleagues in Congress to combat future abuse and help recover the benefits that were fraudulently paid out. Especially as we rebuild from the COVID-19 pandemic, American taxpayers deserve better."

BACKGROUND

Unchecked unemployment fraud is delaying legitimate payments, diverting funds away from unemployed workers, and turning thousands of Americans into unwitting identity theft victims.

The Combatting COVID Unemployment Fraud Act would:

Prevent fraud on the front end. Requires verification of identity, earnings, and prior employment of applicants prior to authorizing benefits and allows states to claim reimbursement for administrative expenses to improve identity verification.
Support claw back of fraudulently paid dollars. Establishes the joint COVID Unemployment Fraud Taskforce and incentivizes States to go after fraud by allowing them to retain 5 percent of recovered funds.
Provide relief to victims of unemployment fraud and identity theft. Implements protections for taxpayers and victims of unemployment fraud.
CLICK HERE for a section-by-section summary. CLICK HERE for the text of the bill.

The U.S. Department of Labor estimates that at least $63 billion -- and as much as $89 billion -- in unemployment benefits have been improperly paid since March 2020, largely due to fraud. The identity verification company ID.me estimates the true amount could be as high as $200 billion.

Despite multiple reports since last summer from the U.S. Department of Justice, Secret Service, and Government Accountability Office (GAO) raising alarm bells about widespread fraud, Democrats extended COVID unemployment programs through September 6th, 2021, with no additional protections against fraud -- and without holding a single hearing to determine how to prevent it.

Last week, Congresswoman Walorski hosted a panel with Ways and Means Republicans to examine the issue of rampant unemployment fraud. The panel featured fraud experts, consumer advocates, state and local officials, and victims of identity theft who highlighted the need to do more to prevent fraud before it occurs rather than focusing on recovering funds after the fact.

Video of the panel is available here.

A companion bill was introduced by Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee.

Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee and the Ranking Member of the House Ethics Committee.

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