Hearing of the US Senate Finance Committee - Preventing Overpayments, and Eliminating Fraud in the Unemployment Insurance System

Statement

Hearing Statement: "Preserving Integrity, Preventing Overpayments, and Eliminating Fraud in the Unemployment Insurance System"

Today, Sen. Tom Carper (D-Del.) participated in the Finance Committee hearing, "Preserving Integrity, Preventing Overpayments, and Eliminating Fraud in the Unemployment Insurance System." For more information or to watch a webcast of the hearing, please click here. A copy of Sen. Carper's remarks, as prepared for delivery, follows:

"I would like to thank Chairman Baucus for calling this hearing. The importance of preventing improper payments is paramount to all programs, but especially in one as large as the unemployment insurance program. During times of economic stress and high unemployment, unemployment insurance is a critical support to millions of unemployed workers across the country.

"The national unemployment rate has been hovering around 9 percent for some time now -- last month it was a staggering 9.1 percent. The unemployment rate in my own state of Delaware is only a little better at 8 percent. There are a great many people looking for work; and with so many applicants for too few spots, many have not been able to secure gainful employment. Given this economic reality, it is absolutely critical for us to weed out waste and fraud from the unemployment insurance system. Losing more than $17.5 billion to waste and fraud each year--an error rate of 11 percent--is simply unacceptable. These dollars must be targeted to those in need and not lost through mismanagement and error. We must address the high level of improper payments part of the unemployment insurance program now.

"Overpayments are not a problem just for unemployment insurance though. Last year, the total level of improper payments across the federal government was almost $125 billion. Almost every federal agency is reporting high levels of payment errors and fraud. But as our witnesses' testimonies show, there are solutions that can bring down these high levels of overpayments. Earlier this month, I chaired a Federal Financial Management Subcommittee hearing where we looked at a technological solution that is being implemented across the government -- the "Do Not Pay List." The idea is to use the information that we know already to prevent payments to those who should not be getting them. The most basic information is an up-to-date listing of people who have passed away, to avoid giving payments to people who are ineligible because they are dead. Accessing the Social Security Administration's Death Master File is what agencies do to avoid this type of error.

"As we have learned from our witnesses today, the return on investment at the state level for program integrity is significant. But we also know that in these tough economic times, program integrity efforts are usually one of the first line items considered for elimination, often a shortsighted decision with long-term consequences. As a recovering governor, I know the challenge of making tough financial decisions at the state level and this is something I try to incorporate in my decision-making at the federal level. One concept I strove to incorporate in the Improper Payments Elimination and Recovery Act is incentives, in other words, giving decision makers a reason to focus on decreasing improper payments in ways that would affect the bottom line. I look forward to hearing from our witnesses some ideas for how to incentivize states -- which are responsible for administering the unemployment insurance program -- to do the right thing when it comes to decreasing improper payments in the unemployment insurance program."

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