‘The Largest Fraud Attack on the U.S. Ever’

Tuesday, January 5, 2021

Biden’s Covid Czar: We’ll Need Billions More to Fight Pandemic

President-elect Joe Biden has promised a more robust federal response to the Covid-19 pandemic, with a set of ambitious goals that include delivering 100 million vaccine shots in his first 100 days in office.

To get a sense of how the effort will play out, The Washington Post’s Greg Sargent spoke to Jeff Zients, the former director of the National Economic Council in the Obama administration who Biden has selected to coordinate the Covid-19 response.

Some highlights from the conversation:

A “whole of government” effort: Zients said he plans to deploy all the available tools of the federal government, including a more aggressive use of the Defense Production Act to increase vaccine production. "We will use the DPA wherever necessary,” he said, citing other areas where the law could be deployed to provide needed supplies, including testing equipment and medical gear.

A focus on the whole country: Zients said that getting vaccines to rural parts of the country presents a major challenge. The Biden administration may deploy mobile units to reach hard-to-reach locations, and could lean more heavily on federally funded community health centers to deliver the vaccine.

It will cost more money: The $28 billion Congress provided in the most recent Covid relief bill — $20 billion for acquisition and $8 billion for distribution — is just a “down payment” on what it will take, Zients said. Although he didn’t cite a specific figure, he said the government will need “significantly more funding” before all is said and done.

Speaking in Georgia Tuesday, Biden addressed the need for more federal effort on the pandemic, as well as the need for more money. “There’s no planning,” Biden said of the vaccine rollout so far. “The federal government has done virtually no planning. I’m going to need their help in making sure that we establish thousands of federally run and federally supported community vaccination centers. We can do this, but it costs money.”

Biden also vowed that citizens would be able to get vaccines and treatments for free — another effort that will require additional funding. “I guarantee you that in my administration, there will be no question – the vaccination is free . . . Treatment for COVID will be free . . . across the board,” he said.

Unemployment Benefits Fraud Tops $36 Billion

At least 10% of the $360 billion Congress provided for unemployment benefits in the Cares Act has been distributed improperly, mostly due to fraud, according to a preliminary analysis by the Office of the Inspector General for the Department of Labor.

“This is the largest fraud attack on the U.S. ever. Period,” Blake Hall of ID.me, which provides identity-verification to state unemployment agencies, told CNBC. “And it’s not even close.”

Most of the fraud is concentrated in the Pandemic Unemployment Assistance program, a temporary effort to help people who are usually ineligible for benefits, including contractors and the self-employed. More than 8 million people were receiving benefits through the PUA program in December.

In some states, more than 35% of applications for PUA were fraudulent, with most involving identity theft. Organized crime has been involved, including criminal groups in China, Nigeria and Russia, CNBC’s Greg Iacurci reported.

The new $900 billion Covid relief bill includes another $120 billion for the unemployed, as well as more stringent requirements for aid recipients, including documentation of employment. But those new rules could make it harder to distribute benefits quickly, delaying payments by weeks or months.

“It’s a little bit of a high wire act because there’s so much pressure to get money out,” Bill McCamley, cabinet secretary of the New Mexico Department of Workforce Solutions, told CNBC.

2021 Deficit On Track to Total $2.3 Trillion: Budget Watchdog

The federal budget deficit for fiscal year 2021 is on track to total $2.3 trillion, or 10.4% of gross domestic product, lower than the record $3.1 trillion deficit last year but higher than any other year outside of World War II, according to a new estimate from the budget watchdogs at the Committee for a Responsible Federal Budget.

The group notes that its estimate is a rough one and could change substantially when the nonpartisan Congressional Budget Office releases its assessment of the massive coronavirus relief and government funding package passed by Congress last month. CBO estimated in September that the deficit for fiscal year 2021 would be $1.8 trillion, but that was before Congress passed an additional Covid relief package costing roughly $900 billion.

The Committee for a Responsible Federal Budget says that economic and technical changes will partially offset the additional expenditures, reducing its deficit projection by about $250 billion. Foremost among those changes, the group expects GDP to be “substantially higher” than CBO previously projected as forecasts for the economy have picked up.

“The stronger-than-projected pace of the economic recovery, higher-than-expected inflation, growing vaccine availability, and enactment of additional stimulus should all increase nominal GDP relative to CBO’s prior estimates,” CRFB said. “While CBO estimated FY 2021 GDP of less than $21 trillion in July, we now believe it will exceed $22 trillion.”

The need for budget reforms, and the obstacles to them: A paper released last week by Erald Kolasi and C. Eugene Steuerle of the Urban-Brookings Tax Policy Center offered some perspective on the long-term budgetary challenges the United States faces — and the constraints that the Biden administration could face in charting a new fiscal course. They note that, even before the virus hit, the fiscal outlook was clouded by a large imbalance between scheduled spending growth and projected revenues:

“Higher federal debt levels alone may make it harder for the president-elect to make major shifts in the nation’s fiscal path. What seems clear is that absent major reforms that significantly reduce built-in growth rates in health and retirement programs, raise revenues, or both, our current fiscal trajectory may become more locked in than ever.…

“Though the current crisis adds quite significantly to debt, some reprieve is projected in the form of lower interest costs for the medium-term. These lower interest costs largely reflect the impact on interest rates of, and monetary policy’s reaction to, a world-wide recession. However, the share of federal spending for anything other than health, Social Security, and interest on the debt will continue to shrink post-recession and almost certainly continue to do so without major budgetary reform.

“All these factors provide powerful headwinds against any presidential effort to shift federal priorities long-term, even while the current pandemic and recession highlight the need for government to start focusing more on other needs of American families, including better preparation for future pandemics and emergencies.”

Poll of the Day: 75% Say $600 Checks Are Too Little

Would you rather have $600 or $2,000? If that question seems like a no-brainer, you won’t be surprised by the results of a new Hill-HarrisX poll that found that 75% of registered voters surveyed said that $600 in coronavirus relief payments is “too little.” Another 15% said it was the right amount and 8% called it too much. Views of the $600 payments were pretty consistent across parties, with 77% of Democrats and independents calling the amount too small and 71% of Republicans agreeing.

By contrast, the survey found that 57% of voters said $2,000 is "about the right amount" for relief payments while 27% said it was still too little.

"Voters across party affiliation and income levels are of a consistent view that $600 in COVID relief is too little and a strong majority agree with President Trump and the Democrats that $2,000 is an appropriate amount and more support is needed," Dritan Nesho, CEO and chief pollster at HarrisX, told Hill.TV.

The survey of 3,787 registered voters was conducted online from December 30, 2020 to January 3, 2021. It has a margin of error of 1.59 percentage points.

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‘The Largest Fraud Attack on the U.S. Ever’