With Democrats continuing to turn a blind eye to the billions of dollars lost to unchecked unemployment fraud on the American taxpayers’ dime, top Republican on the Ways and Means Committee Rep. Kevin Brady (R-TX) opened a Republican meeting investigating the burden of unemployment fraud on our economic recovery and thousands of Americans.
- “Faced with billions of dollars lost to unchecked unemployment fraud involving organized cybercrime and international crime rings, Democrats have ignored repeated calls for congressional oversight hearings.
- Fraud could represent “…half of all the COVID unemployment aid. Said another way, $400 billion is more than the entire 2021 budgets of the Army and Navy combined.”
- “This is not a victimless crime. Unchecked fraud delays legitimate payments from being made and diverts funding away from unemployed workers. It also turns thousands of Americans into unwitting identity theft victims.”
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Rep. Brady’s full remarks as prepared for delivery appear below.
Good afternoon – and thank you all for joining us. Thank you to Congresswoman Walorski for leading this roundtable discussion with me today.
I also want to thank our guests for being here today and for their testimony that’s very insightful.
Before I turn it over to Jackie , I’d like to briefly outline what’s at stake here for taxpayers.
Right now, our Democrat colleagues are continuing to turn a blind eye to what is possibly the greatest theft of taxpayer dollars in American history.
Faced with billions of dollars lost to unchecked unemployment fraud involving organized cybercrime and international crime rings, Democrats have ignored repeated calls for congressional oversight hearings.
Make no mistake, in the early days of the pandemic, when we closed down our economy, shuttered businesses, and told workers to stay home – it was necessary to help the jobless.
But these programs lingered and became one of the most flawed and wasteful recovery efforts ever enacted by the federal government.
In fact, total state and federal spending on enhanced pandemic unemployment benefits exceeded $850 billion in less than two years.
These programs have stunted our economic growth and worsened the labor shortage, resulting in the highest inflation in 40 years.
As of today, we don’t know how much of the taxpayers’ dime has been lost to fraud.And that’s the point.
At the low end, the White House estimates nearly $80 billion has been lost to fraud last year.
But outside experts put that number much higher, estimating that criminal fraudsters have stolen $400 billion from American taxpayers.
That’s half of all the COVID unemployment aid. And put another way, $400 billion is more than the entire 2021 budgets of the Army and the Navy combined.
And yet Democrats have the nerve to say that Americans need to pay more in taxes.
This is not a victimless crime. Unchecked fraud delays and diverts funding awayfrom unemployed workers. It also turns thousands of Americans into unwitting identity theft victims.
In addition to siphoning dollars from the U.S. Treasury, it is becoming increasingly clear that groups perpetrating unemployment insurance fraud pose a potential national security risk.
As these fraud cases work their way through the court system, we are learning more about the involvement of foreign actors and international organized crime groups persistently targeting state systems.
Some of these groups used American citizens as “money mules” to launder funds through the U.S. financial system, and subsequently to offshore bank accounts.
As an example, in May of last year, the U.S. Attorney’s Office in Massachusetts indicted two Nigerian nationals charged with conspiracy to commit bank and wire fraud and engaging in unlawful monetary transactions. This was in connection with expansive online fraud schemes,including pandemic unemployment assistance fraud.
In November of last year, the U.S. Attorney’s office in Pennsylvania brought an indictment against a Turkish citizen charged with mail fraud, wire fraud, and money laundering in connection with unemployment insurance fraud.
I look forward to hearing more from our guests about the prevalence of these cases around the country.
Last year, when congressional Democrats rammed through their partisan $1.9 trillion so-called COVID stimulus, which drove inflation by the way in a major way, our colleagues rejected numerous Republican amendments that would have targeted relief and prevented fraud.
Now, the Biden Administration has taken unilateral action to sweep suspected fraud under the rug, allowing states to waive large numbers of suspicious claims and forgo recovery and restitution for taxpayers.
This is a cover up from the Biden Administration on an issue that has cost American taxpayers hundreds of billions of dollars.
Enough is enough. It’s time for Congress to go after fraudsters and recover the dollars that have been lost.
That’s why, on behalf of the Ways and Means Republicans, I’ve introduced the Combatting COVID Unemployment Fraud Act of 2021, which focuses on three solutions:
- Preventing fraud on the front end;
- Supporting the claw back of fraudulently paid dollars; and
- Providing relief to victims of unemployment fraud and identity theft.
Our bill would stop the “pay and chase” models of benefits by emphasizing identity verification and putting in place digital identity proofing services BEFORE we give out the benefits
We need to make sure people are who they say they are and have earned what they said they did, BEFORE we give out benefits.
It also establishes a COVID Unemployment Fraud Taskforce to focus on recoupment by clawing back dollars from criminals and increasing prosecution.
Finally, the bill provides relief to victims of unemployment fraud by supporting resource centers to assist them.
With a backlog of 16 million tax returns, Democrats’ dysfunctional IRS is unprepared to help those Americans who may only have just learned they were fraud victims.
I worry economic growth has peaked for this Presidency and we are entering a wage-price spiral that will drive inflation higher and longer for Americans
Economic optimism is down, both for families and small businesses, and there is, as I said, a very real chance we’re in a wage-price spiral.
We know American families have lost three years of wage gains in just the first year of the Biden Administration.
This is a true failure of leadership among Democrats in Congress and the Biden White House.
This problem of unemployment fraud has created an added burden that is placing undue stress on thousands of Americans when they can least afford it.
There is simply too much at stake not to act.
Again, I want to thank our witnesses for being here today, for your testimony, and for your efforts to shed a light on this crisis.
And with that, I’ll turn this hearing over to Congresswoman Walorski.