Watchdog: US may have misspent $191B in pandemic unemployment benefits

The Department of Labor’s (DOL) internal watchdog is estimating that a minimum of $191 billion in pandemic unemployment benefits may have been misspent.

DOL Inspector General Larry Turner said in testimony submitted Wednesday to the House Ways and Means Committee that “at least $191 billion in pandemic UI payments could have been improper payments, with a significant portion attributable to fraud.”

That figure is nearly $30 billion higher than the $163 billion estimate Turner gave in testimony last year to the Democratic-controlled Senate Homeland Security and Governmental Affairs Committee.

The Ways and Means panel, chaired by Republican Rep. Jason Smith (Mo.), is meeting Wednesday for a hearing on what Smith has called “the greatest theft of taxpayer dollars in American history, the massive fraud perpetrated in the unemployment insurance program that skyrocketed with the COVID-19 pandemic.”

“With these varying estimates, it’s clear that the Biden Administration and Congress are in the dark about the size and scope of the greatest theft of taxpayer dollars in American history. The new Republican majority is turning on the lights,” Smith said. 

The government created four new unemployment programs as the COVID-19 pandemic hit the country in an effort to help impacted workers, according to the Government Accountability Office (GAO), and the quick dispersal of funds opened up the programs to exploitation. 

Citing DOL statistics, GAO puts the amount the federal government paid out in unemployment insurance benefits at around $878 billion between April 2020 and September 2022.

GAO said in a report last month “substantial levels of fraud and potential fraud in unemployment insurance (UI) programs during the pandemic.” Though it clarified that no measure “completely and reliably indicates the extent of fraud in UI programs,” GAO estimated that fraud specifically may have exceeded $60 billion. 

Turner’s testimony says the DOL’s office of inspector general is “committed to meeting the challenges created by the COVID-19 pandemic” and to helping improve “the efficiency and integrity” of the unemployment insurance program. 

“Strengthening the UI program to prevent fraud before it occurs and to detect it when it does are key objectives to ensure that unemployed workers expeditiously receive much needed benefits while safeguarding tax dollars directed toward that goal,” Turner wrote. 

After taking control of the lower chamber from Democrats in the midterms, Republicans have put oversight of the Biden administration and scrutiny into the COVID-19 pandemic among their top priorities for probes.