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Chairman Smith Opening Statement: Markup of H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act

February 28, 2023

As prepared for delivery

“At the height of the COVID pandemic, government lockdowns shuttered Main Street businesses and kept American workers at home. Congress provided targeted and temporary support for workers and businesses – including through unemployment insurance.

Unfortunately, that work was undermined, and many of those families fell victim to predatory fraudsters in what appears to be the greatest theft of taxpayer dollars in our lifetime. And just when families needed these dollars the most, fraudsters diverted and delayed their payments. Worse, an untold number of Americans became victims of identity theft.

Since 2020, Ways and Means Republicans have sounded the alarm about the massive fraud in the COVID unemployment benefits program. Requests to hold oversight hearings were ignored by Ways and Means Democrats when they were in control of Congress.

What’s worse, Democrats made it easier to defraud taxpayers by voting to end ID verification requirements and phaseouts of emergency UI programs they had previously supported. Our colleagues even rejected numerous Republican amendments that would have targeted relief, increased taxpayer safeguards, and prevented fraud.

The Biden Administration has kept itself and the American people in the dark about the size and scope of unemployment fraud that was stolen during COVID. House Republicans are now turning on the lights.

Today we are considering a bill based on this Committee’s oversight hearing with federal officials who testified that the size, scale, and severity of the fraud is worse than the Biden Administration has admitted. Federal officials are still trying to determine how much money was lost to fraud, and they expect to recover far less than what was stolen. For taxpayers who are struggling with inflation and working hard for their income, that is unacceptable.

In less than two years, enhanced pandemic unemployment benefits exceeded $850 billion. That’s a high number, and as much as half of that amount may have been lost to fraud.

That’s right: The unemployment insurance program – intended to be a lifeline for our workers – was turned into one of the most flawed and wasteful recovery efforts ever enacted by the federal government.

The Biden Administration’s Department of Labor’s Inspector General believes significant fraud played a role within its estimate – a new estimate – of $191 billion in improper payments., an identity verification company hired by many states, estimated an astounding $400 billion in fraud.

More recently, the Government Accountability Office released its own report, making an early estimate that at the very low end, at least $60 billion went to criminals.

That’s more than the entire 2021 budgets of the Army and the Navy combined.

A Utah woman lost her job after a cyber-criminal stole her identity, bank account information, and weekly benefit check. Many more Americans have stories just like hers. Unemployment insurance meant to help them get through temporary joblessness was stolen, their most sensitive information compromised by criminals, while Democrats in Washington turned a blind eye.

In addition to run-of-the-mill thieves, international crime rings took advantage of our national crisis. Law enforcement busted several rings that made off with millions, often using Americans as “money mules” to launder money offshore.

The Biden Administration has been asleep at the wheel. The President has bragged about appointing a “Chief Pandemic Prosecutor” 14 months into his administration, a position that has now sat vacant for months. The Biden Administration also changed the rules to make it easier for states to sweep potential cases of fraud under the rug.

This is a cover up from the Biden Administration on an issue that has cost American taxpayers hundreds of billions of dollars.

Well, enough is enough. It’s time for Congress to go after fraudsters and recover the dollars that have been lost.

The Protecting Taxpayers and Victims of Unemployment Fraud Act will recover stolen taxpayer money, help states ensure this scale of fraud never happens again, and help bring to justice those who committed these crimes.

This bill is co-sponsored by every Republican Member of this Committee and allows states to retain a percent of fraudulent overpayments recovered, policies supported by the Labor Department’s Inspector General and in past budget requests by both President Trump and President Obama.

The bill also extends the statute of limitations for criminal charges or civil actions for prosecuting fraud from 5 to 10 years, as recommended by the Pandemic Response Accountability Committee in testimony provided to the Ways and Means Committee just a few weeks ago.

Unemployment insurance theft has put American families in a terrible position, and taxpayers expect Congress to go after and recover every single possible dollar that was stolen by criminals and international crime rings.

I look forward to today’s discussion of this bill.”