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Chairman Smith Opening Statement:  The Greatest Theft of Taxpayer Dollars – Unchecked Unemployment Fraud

February 7, 2023 — Blog    — Opening Statements    — Press Releases    — Unemployment Insurance Fraud    — Work and Welfare   

WASHINGTON, DC – House Ways and Means Committee Chairman Jason Smith (MO-08) shined a spotlight today on how Democrats, at every turn, blocked investigations into the greatest theft of taxpayer dollars in American history. In the new majority, Republicans are investigating what exactly is being done or not done to determine the size, scope, and severity of stolen unemployment insurance funds.

As prepared for delivery.

“Today’s hearing has been a long time coming. For more than two years, Republicans have been sounding the alarm about the greatest theft of taxpayer dollars in American history, the massive fraud perpetrated in the unemployment insurance program that skyrocketed with the COVID-19 pandemic. While many Americans who actually qualified for these benefits were left struggling to reclaim their benefits and their identity, upwards of tens of billions of taxpayer dollars have been stolen.

“The unemployment benefits passed in the CARES Act came at a time when millions of Americans were losing their jobs overnight as government shut down businesses and ordered people to stay at home. Livelihoods were ripped away. There’s no question folks needed help, which is exactly why Congress should have protected this program and those who needed it against the criminals who exploited it to commit fraud.

“UI fraud is not a victimless crime. For example, 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’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.

“The range of estimates alone is sufficient reason for today’s hearing.

“ID.me, an identity verification company hired by many states, estimated an astounding $400 billion in fraud. That suggests thieves may have stolen almost half of the $878 billion taxpayers spent on unemployment insurance.

“The White House itself acknowledged that tens of billions were made in improper payments. They estimate $104 billion lost.

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

“In just one example of fraud, one individual was able to file an unemployment claim in 29 states and receive $500,000 in fraudulent benefits. 

“With these varying estimates, it’s clear that the Biden Administration and Congress are in the dark about the size and scope of the greatest theft of taxpayer dollars in American history. The new Republican majority is turning on the lights.

“We tried when we were in the minority. As early as 2020, Republicans raised the alarm about fraud based on red flags from the Department of Labor’s Inspector General and the Secret Service.

“As the evidence of fraud escalated, I am sorry to say that Democrats continued to turn a blind eye.

“They ignored two requests from Republicans on this committee to hold an oversight hearing just like this one.

“Democrats blocked a congressional resolution to get answers about what the Department of Labor knew about funds going to international crime syndicates.

“Democrats even voted to end the identity verification requirements and phaseouts of emergency UI programs they had previously supported in December 2020.

“Republicans proposed amendments to protect taxpayers and those who needed to get unemployment payments, Democrats rejected them outright. Instead, they unilaterally extended unemployment benefits in their so-called “stimulus.”

“They did this even as most businesses had already reopened and at a time when the Congressional Budget Office projected the economy to return to pre-pandemic levels of growth by the middle of 2021 and unemployment to steadily decline without any further stimulus spending.

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

“Those with their identity stolen weren’t the only victims. Democrats’ unrestrained COVID unemployment insurance programs fueled a labor shortage that punished American families and small businesses and denied individuals the paycheck and dignity that come from a job.

“Just two days ago, small business owners in West Virginia shared with this Committee their struggle to find workers because Congress made a government check more valuable than a job.

“One of our highest responsibilities as legislators is to be good stewards of the American people’s hard-earned tax dollars. This hearing is so important and sadly long overdue.

“I look forward to hearing from our witnesses today on exactly what the Biden Administration is doing and what Congress should have done and must do to go after criminals and make right this multi-billion dollar wrong.”