$46 Billion in Pandemic Unemployment Fraud — and Counting

$46 Billion in Pandemic Unemployment Fraud — and Counting

House Republican Leader Kevin McCarthy
By Yuval Rosenberg and Michael Rainey
Friday, September 23, 2022

TGIF! We’ll be back in your inbox on Tuesday. Until then, we wish a happy, healthy, peaceful and prosperous Jewish new year to all who celebrate. Here’s what you need to know this evening.

McCarthy Rolls Out a Republican Agenda

House Minority Leader Kevin McCarthy (D-CA) on Friday unveiled a conservative populist agenda ahead of the midterm elections, giving voters a sense of what Republicans hope to accomplish if they can win control of one or both houses of Congress in November.

Speaking to a crowd in Monongahela, Pennsylvania, and joined by a number of Republican representatives, including Minority Whip Steve Scalise (R-LA), Conference Chair Elise Stefanik (R-NY) and rising far-right star Marjorie Taylor Greene (R-GA), McCarthy said the House GOP agenda addresses key issues facing the country, including inflation, energy costs, crime, education and immigration.

What’s in it: The agenda — dubbed the "Commitment to America," echoing Newt Gingrich’s "Contract With America," which provided a rallying point for Republicans as they regained control of the House in 1994 — is light on details, offering more sweeping statements than legislative nuts and bolts. "Starting Day One," it says, "we will work to deliver an economy that’s strong, a nation that’s safe, a future that’s built on freedom, and a government that’s accountable."

The House Republicans did offer some red meat for conservative voters, touching on populist and nationalist themes that resonate with the Republican base, even if the specific proposals would be difficult if not impossible to accomplish with a Democrat sitting in the White House.

For example, McCarthy promised that GOP lawmakers would reverse the Biden administration’s plan to increase IRS funding by $80 billion over 10 years, with some of that funding going toward hiring new staff. "On our first bill, we're going to repeal 87,000 IRS agents," McCarthy said.

Claiming that crime is "skyrocketing" as a direct result of "Democrats’ one-party, defund the police policies and rhetoric," Stefanik said House Republicans would "immediately ensure that we hire 200,000 more police officers across this country to make sure that our communities are safe." She also said they would "go after the radical leftist prosecutors [and] DAs who are refusing to abide by the rule of law and are prioritizing the criminals rather than the law-abiding citizens." 

Scalise and Rep. Jim Jordan (R-OH) vowed to use the House’s oversight and investigative powers to look into issues including China’s role in the Covid-19 pandemic and the situation at the southern border. "We will give Secretary [Alejandro] Mayorkas a reserved parking spot, he will be testifying so much about this," Scalise said, referring to the head of Homeland Security.

Playing it safe: Henry Olsen, a conservative opinion writer at The Washington Post, noted the lack of details. The plan "doesn’t exactly provide a clear picture as to what a Republican-led House might actually do in power," he wrote. "Instead, it safely hews to clear GOP staples, such as encouraging private-sector growth and making America safe at home and abroad."

That vagueness is certainly intentional. A more specific policy platform issued early this year by Sen. Rick Scott (R-FL) drew a backlash and ongoing Democratic attacks. The House GOP agenda’s lack of specifics, by contrast, is a safer play as Republicans seek to regain power in Congress and McCarthy maneuvers to be the next speaker.

"Nothing in the document contains anything particularly innovative, and that’s probably both by design and smart," Olsen wrote. "Genuinely creative ideas can become the lightning rod of a campaign, and the party has no need to put forward potentially controversial proposals. It only needs to gain five seats to retake the House."

At the same time, the lack of policy details could make it harder to rally supporters. "The flip side is that the Republican leader offered no captivating concept to generate enthusiasm among voters," Olsen said. "Prior House GOP campaign efforts have included ideas such as embracing the then-revolutionary idea of across-the-board tax cuts (1978) or congressional term limits (1994)."

Still, the plan seems to be going over well with GOP lawmakers, who have been reluctant to provide any details on their agenda since former president Donald Trump took over the reins of the party. Senate Minority Leader Mitch McConnell (R-KY) saluted McCarthy’s effort. "Less inflation. More law and order. Parents' rights. Border security. American energy," McConnell said in a tweet.

Biden responds: Speaking at an event hosted by the Democratic National Committee in Washington, President Joe Biden pushed back against the criticisms leveled by House Republicans, dismissing their agenda as "a thin series of policy goals with little or no detail."

Biden offered to fill in the details, giving his interpretation of what Republicans might do if they are victorious in November. "If Republicans win control of the Congress, abortion will be banned," he said, before noting that he would veto any such effort.

He also took aim at GOP lawmakers who have proposed to fundamentally alter the way Social Security is authorized and funded. "So, in 46 days, America is going to face a choice," Biden said. "If Republicans control the Congress, Social Security will be on the chopping block."

The bottom line: With Republicans expected to gain control of the House in the midterms, McCarthy clearly has his eyes set on the speakership. With his "Commitment to America," McCarthy is attempting to give his fellow conservatives a positive agenda to run on that moves beyond criticism of Biden and the Democratic Party — though Republicans still prefer to have the election be a referendum on the president and his policies.

Pandemic Unemployment Fraud Totaled $46 Billion, Watchdog Says

A federal watchdog’s estimate of potential unemployment fraud during the pandemic has swelled to nearly $46 billion.

The Labor Department’s Office of Inspector General said in a report this week that it had identified and estimated $45.6 billion in potentially fraudulent unemployment payments obtained by individuals who filed claims in multiple states, used suspicious email accounts or used Social Security numbers of dead people or of federal prisoners. The total covers the period from March 2020 to April 2022.

The new estimate updates one from June 2021 that found about $16 billion in potential fraud (see details in the chart below).

The report said that 205,766 Social Security numbers of dead people were used to file fraudulent claims for pandemic unemployment benefits.

Labor Department Inspector General said that more than 1,000 people have now been charged with crimes involving unemployment insurance fraud since the beginning of the pandemic. "Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program—resulting in historic levels of fraud and other improper payments," he said in a statement.

Why it matters: Pandemic aid programs were purposely designed to pump money into the economy with relatively few safeguards that would have slowed the flow of funds. For that reason, they also proved to be inviting targets for fraudsters and criminals. This week also saw the Justice Department charge 47 people with stealing $250 million in pandemic aid funds meant to provide meals for needy children. The latest estimate of unemployment fraud "illustrates the immense task still ahead of Washington as it seeks to pinpoint the losses, recover the funds and hold criminals accountable for stealing from a vast array of federal relief programs," writes Tony Romm of The Washington Post.


Quote of the Day

"We just think the Fed has reflected that they are at maximum uncertainty about how the economy will evolve. ... If you were to drive a car at 75 miles per hour with uncertainty over where the road is going then you have a pretty high chance of an accident."

Mark Cabana, head of U.S. rates strategy at Bank of America, in a New York Times article looking at why many investors believe that the Fed’s campaign on interest rate hikes will drive the economy into recession and force the bank to start cutting rates faster than officials expect. "The market thinks the economy will slow faster than the Fed does," Cabana told the Times. "The market thinks that will slow inflation faster than the Fed does. And the market thinks that will cause the Fed to pivot from tackling inflation to stimulating growth."

The S&P 500 index and Dow Jones Industrial Average on Friday fell to their lowest levels since late 2020.

Number of the Day: $80

Oil prices fell more than 5% Friday, dropping to an eight-month low. The benchmark price of West Texas intermediate crude sank below $80 a barrel for the first time since January. The average price of a gallon of regular gasoline is now $3.69, according to AAA, 20 cents lower than it was a month ago.

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