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

By Yuval Rosenberg

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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