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Ways and Means One Step Ahead of New CNN Investigation

June 03, 2015

Last month, Republican members of the House Ways and Means Committee introduced a series of bills to strengthen the integrity of our unemployment insurance and Supplemental Security Income benefits programs—and for good reason. As a recent investigation by CNN revealed, a “tsunami of fraud” is sweeping the nation in the form of improper unemployment-benefit payments, affecting tens of thousands of unsuspecting Americans and resulting in roughly $5.6 billion per year of total fraud. It’s stunningly easy for crooks to pull off. 

Criminals are simply logging on to the government website, entering someone else’s personal information, and applying for unemployment benefits in his or her name—but listing their own mailing addresses. In an effort to make applying for benefits a quick and efficient process, benefit programs often fail to verify the identity and employment status of the alleged person applying—they simply send a loaded debit card to the approved applicant at the mailing address provided.

In other words, victims often don’t even know their identity has been compromised until the crime has been committed and the money is out the door.

UI Fraud CNN

The U.S. Department of Labor’s inspector general dubbed the unemployment insurance program “particularly at risk.” Why? Because no one is really checking whether the applicant is actually unemployed.

These crimes aren’t just flukes. According to CNN, there were 97,000 fraudulent claim attempts—to the tune of almost $400 million—in the state of Florida alone over a 15-month period. In a letter to U.S. Labor Secretary Tom Perez, Jesse Panuccio, Executive Director of the Florida Department of Economic Opportunity said, “Organized criminal enterprises are attacking public-benefit systems on a daily basis.” In layman’s terms: Everyday, somewhere in the U.S., criminals are taking advantage of the unemployed Americans who really need help.

The problem is these programs place too much emphasis on getting money out the door before making sure it is going to those eligible. That’s why the Ways and Means Committee is ready to take this issue on. This morning, the Human Resources Subcommittee is holding a hearing to address these problems and find real solutions.

The hearing will look into how to stop this abuse, like by using data matches to prevent improper payments or integrating other proven practices to reduce fraud and improve services for Americans in need. As Subcommittee Chairman Boustany said in announcing the hearing, “It’s long past time that we identify the causes and start implementing real reforms to improve the integrity of these programs.”

The federal government needs to lead by example and get serious about reducing fraud and waste in safety-net programs. With today’s hearing, the committee will continue this discussion and bring us one step closer to stopping this wasteful and pervasive abuse.