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Chairman Smith on the House Floor: H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act

May 11, 2023

As prepared for delivery.

“This crucial legislation will finally protect taxpayers and victims of fraud against the largest theft of tax dollars in American history.

“Americans are suffering under a cost-of-living crisis, fueled by Democrats’ reckless spending. It has brought us to the brink of recession and spurred the highest increase in interest rates in 16 years. It must be particularly infuriating for folks to also see that it’s not just the American dream that’s being stolen from them, but their identities and their tax dollars. Criminal organizations and foreign fraudsters exploited the pandemic to steal hundreds of billions in payments intended to keep workers afloat amidst government lockdowns – and the victims need our help.

“How much has been stolen? The Department of Labor Inspector General told the Ways and Means Committee that taxpayers may be on the hook for at least $191 billion in improper payments. And that’s just the lower estimate. Outside experts estimate up to $400 billion in improper payments.

“While working Americans were trying to piece their lives back together during the pandemic, Democrats did nothing to fight fraud. When Democrats held the majority on Ways and Means, they ignored, they blocked, and shot down common-sense safeguards, and refused to hold even one hearing on this fraud. That inaction made it clear that their soft-on-crime agenda does not just apply to car-jackings and looting department stores, it applies to defrauding the federal government as well.

“During his State of the Union, President Biden said ‘the watchdogs are back.’ He rolled out the position of ‘Chief Pandemic Prosecutor’ at the Department of Justice. Since then, even as we’ve discovered more instances of fraud, the Biden Administration official responsible for prosecuting it has resigned, and the position sits vacant.

“That’s not accountability.

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

“These are stolen tax dollars, which makes every person in America a victim of this fraud. Today’s vote is an important step toward ending that suffering and delivering accountability.

“The Protecting Taxpayers and Victims of Unemployment Fraud Act gives states the tools they need to go after fraudsters and shores up vulnerabilities by improving identity verification and modernizing state UI systems.

“It allows states to retain 25 percent of fraudulent federal funds recovered. This is a real incentive for states to pursue what can be costly investigations and prosecutions because now they can use recovered funds to improve UI program integrity and fraud prevention.

“These dollars can go towards hiring investigators and prosecutors to go after criminals to recover fraud payments. This will also give states the resources to modernize systems and technology to better verify identity and income for unemployment, and deter, detect, and prevent improper payments.

“This legislation also allows states to keep five percent of UI overpayments recouped in the future to continue to improve benefit delivery and eligibility verification. This includes matching state lists against databases which will help reduce payments to deceased and incarcerated individuals.

“Many of these reform ideas are bipartisan and long overdue. Some are supported by the Department of Labor Inspector General and were even included in past budget requests from President Trump and President Obama. Even President Biden has included several of the ideas in the Protecting Taxpayers and Victims of Unemployment Fraud Act in his most recent budget request.

“I am hopeful House Democrats will join here to also protect taxpayers and support this bill.

“Thank you.”