Weekly Column: Protecting Idahoans From Unemployment Fraud

As Idahoans and Americans across our country are working hard to overcome the incredible challenges of the past year and turn the corner on the pandemic, we as a nation, unfortunately, must do more to deter criminals from abusing taxpayer-funded unemployment assistance to ensure taxpayer funds reach Americans truly in need of assistance.  l joined U.S. Representative Kevin Brady (R-Texas), Ranking Member of the House Ways and Means Committee, in introducing the Combatting COVID Unemployment Fraud Act of 2021 that would help prevent fraud in COVID unemployment programs, recover fraudulently paid benefits and provide relief for Idahoan and American taxpayers and victims of unemployment fraud. 

With the expansion of federal unemployment assistance, we have seen a huge surge in unemployment fraud.  In an April 2021 report, the Federal Trade Commission reported, “As Congress worked to stem the economic hardship from staggering unemployment, identity thieves targeted unemployment insurance benefits in record numbers.  Of the identity theft reports received in 2020, over 394,000 came from people who said their information was misused to apply for a government benefit. This represents a staggering increase of nearly 3000% from 2019.”

As Idaho has taken steps to end its participation in three federal pandemic unemployment compensation programs, I am working with my colleagues in Congress to strengthen fraud protections to ensure Idahoans and all Americans are not subjected to identify theft and other scams resulting in federal taxpayer dollars getting wrongly paid out to criminals. 

In May, Representative Brady and I sent a letter to U.S. Department of Labor Secretary Marty Walsh urging him to work with Congress to combat this widespread fraud that comes at American taxpayers’ expense.  The American Rescue Plan Act provided $2 billion for fiscal year 2021 to the Secretary of Labor for fraud detection and prevention, promoting equitable access and ensuring timely payment of unemployment benefits.  Representative Brady and I stressed, “Given the current amount of fraud in unemployment programs, nationwide, strengthening unemployment programs to detect fraud and prevent improper payments needs to be a high priority, and is key to ensuring those who need unemployment are receiving their benefits in a timely manner.”

We followed this effort with the Combatting COVID Unemployment Fraud Act of 2021, which:

• Prevents fraud on the front end.  By requiring verification of identity, earnings, and prior employment of applicants prior to authorizing benefits and allowing States to claim reimbursement for administrative expenses to improve identity verification.

• Supports claw back of fraudulently paid dollars.  By establishing the joint COVID Unemployment Fraud Taskforce and incentivizing States to go after fraud by allowing them to retain 5 percent of recovered funds.

• Provides relief to victims of unemployment fraud and identity theft.  By implementing protections for taxpayers and victims of unemployment fraud. 

Text and summaries of the Senate bill can be found on the Senate Finance Committee website, at www.finance.senate.gov.  A companion bill was introduced in the House by Representative Brady.

Criminal abuse of taxpayer-funded programs intended to help Americans weather a very difficult time is offensive and destructive.  Legislation aimed at preventing and detecting fraud is warranted and timely, and I will continue to work with my colleagues in Congress to advance the Combatting COVID Unemployment Fraud Act of 2021 and related policy to protect Idahoans and all Americans from this exploitation.

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