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Ways and Means Approves Plan to Recover Hundreds of Billions in Misspent, Stolen Unemployment Benefits

March 01, 2023

WASHINGTON, DC – Yesterday, the House Ways and Means Committee approved legislation to jumpstart recovery efforts on hundreds of billions of dollars of COVID unemployment insurance payments stolen by fraud. The Department of Labor Inspector General estimated that improper payments in pandemic unemployment programs have left taxpayers on the hook for at least $191 billion. Outside experts put the number much higher at $400 billion. Yet, so far only $5 billion has been recovered. The Ways and Means Committee passed H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act, to give states incentives to recover stolen benefits, to ensure fraud of this scale never happens again, and to make it easier for prosecutors to bring criminals to justice.

ONE-PAGER: Protecting Taxpayers and Victims of Unemployment Fraud Act

Click here to watch Chairman Smith’s opening statement.

During yesterday’s mark-up of the legislation, Ways and Means Committee Chairman Jason Smith (MO-08) argued that Congress – after two years of Democrats turning a blind eye on the proliferation of fraud in the unemployment insurance program – owes it to the American people to go after and recover stolen taxpayer dollars:

“We made two requests for oversight hearings, introduced legislation to provide us with the incentives and tools to fight fraud, introduced multiple amendments in this committee to add common-sense safeguards, tried to get the Department of Labor to respond to our requests. All of that was ignored, blocked, and shot down by Democrats in the majority.

Only $5 billion of the potentially $400 billion has been recovered. Meanwhile, the Biden Administration official responsible for prosecuting fraud has resigned and the position sits vacant to this day. After two years of raising the alarm, House Republicans are turning on the lights about the greatest theft of taxpayer dollars in American history.

The American people expect the Biden Administration and Congress to aggressively pursue the criminals who defrauded our constituents. We have a responsibility to use every tool at our disposal to recover that money and leave no stone unturned in the process.”

READ: Chairman Smith’s Opening Statement

With hundreds of billions of unemployment assistance potentially misspent or stolen, individuals in need were left to fend for themselves. While working Americans were trying to piece their lives back together, Democrats did nothing to fight fraud as it was happening and for all of the Biden Administration’s talk, they have dropped the ball as well on going after fraudsters:

Unemployment fraud is not a victimless crime. When millions of working Americans were thrown out of work because of government lockdowns, they had their unemployment benefits and identities stolen. Congress must do everything in its power to recover American tax dollars stolen by criminals and international crime rings:

H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act, protects American taxpayers and unemployed workers who rely on unemployment insurance. During yesterday’s proceedings, Chairman Smith walked through how the bill will help ensure the greatest theft of taxpayer dollars in American history never happens again:

Background – Protecting Taxpayers and Victims of Unemployment Fraud Act

  • Allows states to keep 25 percent of recovered fraudulent overpayments of federal funds.
  • Allows states to use recovered funds to improve program integrity and fraud prevention.
  • Allows states to keep 5 percent of state UI overpayments, conditioned on meeting data matching integrity conditions, and dedicating those funds to preventing future fraud.
  • Extends the statute of limitations for criminal charges or civil actions from 5 to 10 years.

Read the bill text here.

Read Chairman Smith’s opening statement on H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act here.


In addition to H.R. 1163, the Ways and Means Committee marked up the following items for the 118th Congress:

Budget Views and Estimates

The Ways and Means Committee adopted its Views and Estimates for the Budget Committee.

The Views and Estimates give a preview into the Committee’s priorities for the upcoming fiscal year (FY) and FY 2024 Budget Resolution – building on the success of the Tax Cuts and Jobs Act to help small businesses, workers, farmers, and families succeed, bring critical supply chains back to America, connect welfare to work to help families trapped in poverty, protect and strengthen Social Security, and hold the Biden Administration accountable.

“As we make clear in our Views and Estimates, this committee has a lot of important work ahead of it. We must address the various crises the American people face today and build the foundation for a better tomorrow, where American families, farmers, and small businesses can grow and succeed.

“This committee will promote workers and help restore the dignity of work… we will strive to give patients more control over their health care…

“We will also work to strengthen Social Security – which is more important than ever now that the President’s inflation crisis has pushed Social Security further towards insolvency

“Our tax policy efforts will be focused on relief for working families not handouts for woke corporate special interests or imposing $4 trillion worth of tax increases on Americans like President Biden proposed in his last budget…

“[W]e will work to protect and increase America’s economic interests and opportunity while standing up for our values and our intellectual property – both of which are under attack by an increasingly aggressive Chinese Communist Party

“[W]e will engage in negotiations over the current debt limit increase in a manner that is also respectful to American taxpayers and mindful of our nation’s unsustainable debt trajectory….

“Embedded in every policy priority will be a commitment to aggressive oversight…”

Click here to read Chairman Smith’s remarks on the Committee’s Views and Estimates.


Oversight Plan

The Committee also adopted its oversight plan for the 118th Congress, laying the groundwork for holding the Biden Administration accountable. At the top of the list is demanding answers on the $80 billion pay raise that Democrats gave the IRS.

During two years of one-party Democrat rule in Washington, this Committee should have done robust oversight of the Biden Administration – instead, it overlooked the Administration’s worst behaviors.

“Whether it was rampant spending driving up inflation or tax increases that will only further shrink the wallets of families, farmers, and small businesses, the last Congress rammed through unvetted policies that have been a disaster.

Democrats gave the Biden Administration a blank check, and American workers, families, and small businesses have paid the price.

“But today is a new day. We will seek answers to the questions that our colleagues on the other side of the aisle refused to even ask…”

Click here to read Chairman Smith’s remarks on the Committee’s oversight plan.