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Chairman Smith Remarks at Rules Committee: H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act

May 10, 2023

As prepared for delivery.

“Thank you, Chairman Cole and Ranking Member McGovern for the opportunity to speak on this crucial legislation that will protect taxpayers and victims of fraud against the largest theft of tax dollars in American history.

“Americans had their identities and benefit payments stolen from them as criminal organizations and foreign fraudsters exploited the pandemic to steal hundreds of billions of dollars intended to keep workers afloat during an economic crisis.

“Appearing before the Ways and Means Committee, the Department of Labor Inspector General warned that taxpayers may be on the hook for at least $191 billion in improper payments. Outside experts estimate a much larger number – $400 billion.

“Either amount is unacceptable.

“With hundreds of billions of dollars in unemployment benefits potentially misspent or stolen, individuals in need were left to fend for themselves. While working Americans were trying to piece their lives back together, Congress under Democrat rule did nothing to fight fraud as it was happening. When Democrats held the majority on Ways and Means, they ignored, blocked, and shot down common-sense safeguards, and refused to hold hearings on this fraud.

“And for all of the Biden Administration’s talk, they have dropped the ball on going after fraudsters. During his first State of the Union, President Biden said “the watchdogs are back.” Since then, his chief pandemic prosecutor for COVID fraud has resigned and the position is still sitting vacant.

“That’s not accountability.

“We couldn’t afford inaction for two years, and we can afford it even less today.

“The Protecting Taxpayers and Victims of Unemployment Fraud Act takes much needed overdue action to recover fraudulently paid COVID benefits, prevent future fraud, and prosecute the criminals responsible.

“It allows states to retain 25 percent of fraudulent federal funds recovered that they can then use to improve UI program integrity and fraud prevention – providing a real incentive for states to pursue investigations and prosecutions.

“With these dollars, states can hire investigators to go after criminals to recover fraud payments, modernize identity and income verification systems, and deter, detect, and prevent improper payments. Included in these reforms are policies supported by the Department of Labor Inspector General, and in past budget requests from both President Trump and President Obama.

“We also stop UI payments to incarcerated and deceased individuals.

“Finally, we extend the statute of limitations for prosecuting fraud from five to ten years, as recommended by the Pandemic Response Accountability Committee in testimony provided to Ways and Means.

“The amendment offered alongside the underlying bill today adds an extra layer of protection for states. While this bill should result in an increase in the funds states have available to pay future UI claims as improper payments are reduced, the language is necessary to satisfy congressional scorekeepers’ inability to estimate savings from enhanced program integrity measures.

“After years of pressure from Republicans, even President Biden included several of the same fraud recovery and prevention measures contained in this bill in his FY 2024 budget request. I am hopeful House Democrats will finally take a similar step to protect taxpayers and support H.R. 1163.

“Thank you.”