Secret Service Seizes Billions in Fraudulent Covid Relief Payments

By Yuval Rosenberg

Quote of the Day: CDC Says Vaccinated Americans Can Ditch Their
Masks (in Most Places)

“Anyone who is fully vaccinated can participate in indoor and
outdoor activities, large or small, without wearing a mask or
physical distancing. If you are fully vaccinated, you can start
doing the things that you had stopped doing because of the
pandemic. We have all longed for this moment when we can get back
to some sense of normalcy.”

– Dr. Rochelle Walensky, director of the
Centers for Disease Control and Prevention, announcing that fully
vaccinated people no longer need to wear masks or maintain social
distance except under
certain circumstances, like during travel on
buses, trains, planes and public transportation. A maskless
President Joe Biden, speaking from the White House Rose Garden,
called it “a great day for America.”

Biden, GOP Senators Optimistic After Infrastructure Talks

President Joe Biden and a group of senior Republican senators
continued their infrastructure talks Thursday and emerged from a
White House meeting sounding optimistic that a bipartisan deal
could be reached — or that, at the very least, both sides were
talking in good faith.

“We had a very, very good meeting,” Biden told reporters
afterward. “It was great to be back with so many of the colleagues
that I had served with in the Senate and I am very optimistic that
we can reach a reasonable agreement. Even if we don’t it’s been a
good faith effort.”

Biden said he had laid out his plans and how they should be paid
for and that Republicans would come back with another counteroffer.
He said the two sides would talk again next week.

Sen. Shelley Moore Capito (R-WV), the GOP point person in the
infrastructure talks, also said the talks were productive. “We did
talk specifics, and the president has asked us to come back and
rework an offer so that he can then react to that and then reoffer
to us,” she
said. “We’re very encouraged, we feel very
committed to the bipartisanship that we think this infrastructure
package can carry forward.”

Republican Sens. John Barrasso of Wyoming, Roy Blunt of
Missouri, Mike Crapo of Idaho, Pat Toomey of Pennsylvania and Roger
Wicker of Mississippi also attended the meeting, as did Vice
President Kamala Harris, Commerce Secretary Gina Raimondo and
Transportation Secretary Pete Buttigieg.

The bottom line: The two sides still have serious,
fundamental differences over the size, scope and pay-fors of an
infrastructure plan, but the continuing talks next week could
provide some indication of whether a deal can be reached. “We all
know we need to move pretty quickly here,” Blunt said.

Biden is looking for significant progress by Memorial Day,
and he indicated in an interview with MSNBC Wednesday that, while
he wants to strike a bipartisan deal on portions of his proposed
spending packages, he’s also willing to move ahead without GOP
support as needed. "Let's see if we can get an agreement to
kickstart this,” he said, “and then fight over what's left and see
if I can get it done without Republicans, if need be."

Secret Service Seizes Billions in Fraudulent Covid Relief
Payments

The Secret Service has helped recover about $2 billion in
fraudulent unemployment payments connected to Covid relief efforts,
the agency
announced Wednesday, and the funds are being
returned to state unemployment offices.

“The amount of unemployment insurance benefits provided in
response to the COVID-19 pandemic is unprecedented in the history
of the nation’s unemployment insurance system,” Larry D. Turner,
Acting Inspector General at the Department of Labor, said in a
statement. “Unfortunately, the significant increase in benefits
made the program a target for those seeking to defraud government
programs.”

Saying that the $2 billion figure is a “conservative estimate”
and that investigations are ongoing, Roy Dotson, Secret Service
assistant special agent in charge, told
CNBC that the crimes were typical of the kind of
cyberfraud the agency deals with every year, though at a larger
scale. Most of the fraudulent unemployment payments involved
identity theft, Dotson said.

The agency also said it has initiated hundreds of investigations
into potential fraud in several Covid relief programs and has
seized $640 billion in funds dispersed through Economic Injury
Disaster Loans and the Paycheck Protection Program.

The bottom line: The sheer size of the Covid relief
programs, along with the unprecedented speed at which they were
rolled out, made a fat target for fraudsters. A report from the
Labor Department’s Inspector General in March said the programs
have involved fraud worth tens of billions of dollars. Of the
roughly $896 billion in unemployment program funds dispersed at
that time, at least $89 billion “could be paid improperly, with a
significant portion attributable to fraud.”

Nearly 2 Million People Could See Unemployment Benefits
Slashed

Republican governors in at least 16 states have announced that
they will withdraw from federal unemployment programs starting next
month, potentially reducing or eliminating benefits for more than
1.9 million people.

Coming on the heels of last week’s disappointing April jobs
report, the rapidly expanding effort to force more people back into
the labor market will fall most heavily on the 1.4 million people
in those states who are receiving benefits through temporary
federal programs such as Pandemic Unemployment Assistance, a group
that includes the self-employed and gig workers who normally are
ineligible for jobless aid, and those who have exhausted their
state benefits.

The other half a million or so workers will lose the $300 per
week supplement paid by the federal government as Covid relief and
receive only the state-level payments that were in place before the
pandemic. In some states, those benefits are well below the poverty
level.

According to
The Washington Post, the states that have
announced that they will withdraw from the federal programs
include: Alabama, Arkansas, Arizona, Georgia, Idaho, Iowa, Montana,
Mississippi, Missouri, North Dakota, Ohio, South Carolina, South
Dakota, Tennessee, Utah and Wyoming.

If all states with Republican governors pull out of the federal
programs, about 4.6 million people would be affected, CNN’s Tami
Luhby
said, and $29 billion in payments would be
eliminated from the economy.

Why has job growth disappointed? For Republicans, the
lackluster jobs recovery so far is relatively straightforward: Pay
people to stay home and they will do so. Accordingly, removing the
federal unemployment aid will force people to take jobs, at
whatever pay level is offered, thereby boosting the economic
recovery.

“Alabama is giving the federal government our 30-day notice that
it’s time to get back to work,” Gov. Kay Ivey said this week as she
announced her state’s withdrawal from the federal programs.

Democrats say the picture is more complicated, and labor experts
tend to agree. “The slowdown in hiring may instead reflect workers’
concern about their safety and difficulty obtaining child care, or
their trouble finding suitable positions in hard-hit industries
such as tourism on top of mounting frustration about wages they
consider too low,” the Post’s Tony Room and Eli Rosenberg
report. “That means the loss of unemployment
benefits over the next month threatens to inflict new financial
harm on those who say they’re already struggling.”

Can they do that? There are questions about the legality
of states withdrawing from the federal aid programs. In a
letter to Labor Secretary Marty Walsh Thursday,
Sen. Bernie Sanders (I-VT) argued that the Labor Department is
legally required to provide federal aid to all workers, regardless
of what the governors do.

“I am writing to remind you of your congressionally-mandated
requirement to provide Pandemic Unemployment Assistance (PUA)
benefits to workers ineligible for state unemployment aid and
urging you to ensure workers receive these benefits even when
states threaten to take it away,” Sanders said. “As Secretary, you
are obligated to ensure this aid gets to workers.”

More conflict ahead? Sen. Ron Wyden (D-OR) said the move
by the Republican governors could just be the beginning of a
broader effort to rapidly reduce Covid relief spending.

“This is more of the same in terms of what we saw after the 2009
recession, when you saw states like Florida hollow out
[unemployment] benefits, cutting them to the bone,” Wyden told the
Post. “This is a far-right Republican governor-led strategy to rip
new holes in the safety net.”

Biden to Use $7.4 Billion in Rescue Funds to Hire More Public
Health Workers

The White House announced Thursday that it will use $7.4 billion
from the $1.9 trillion American Rescue Plan enacted in March to
recruit, hire and train public health workers to respond to the
coronavirus pandemic and prepare for future health threats.

“The funding announced today will allow the United States to
expand its public health workforce, creating tens of thousands of
jobs to support vaccinations, testing, contact tracing, and
community outreach, and strengthen America’s future public health
infrastructure,” the White House said in a fact sheet about the
program.

Of the total spending, $4.4 billion will be used to boost
staffing at strained state and local public health departments,
including funding to hire school nurses to help classrooms reopen.
The other $3 billion will go toward a new grant program at the
Centers for Disease Control and Prevention aimed at helping health
departments hire staff, with grant recipients asked to prioritize
recruiting candidates from the communities they serve and from
underrepresented backgrounds.

Why it matters: “The funds could give a much-needed boost
to America’s crumbling public health infrastructure,” The
Washington Post’s William Wan
writes. Local public health agencies lost almost a
quarter of their workers since 2008, he adds, as the CDC’s
emergency preparedness budget was cut by 30% since 2003.

A
report published earlier this month by the
nonprofit, nonpartisan Trust for America’s Health said that the
pandemic had highlighted the risks of chronic underfunding of the
public health system: “To stand a chance against a threat like
COVID-19, the nation needs to sustain higher funding year to year
and invest resources in planning, workforce, and infrastructure for
years beforehand. Not doing so is akin to hiring firefighters and
purchasing hoses and protective equipment amid a five-alarm fire,”
the report said. “While it is too soon to calculate with precision,
it is likely that the United States might have averted spending
much of the trillions of dollars that the COVID-19 pandemic cost if
it had invested just a few billion dollars more in public health
spending earlier.”

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