Republicans Introduce Legislation to Recover Unchecked Unemployment Fraud

Washington, D.C.--With unemployment fraud leaving taxpayers on the hook for roughly $163 billion, and only slightly more than $4 billion recovered, Senate Republicans, led by Finance Committee Ranking Member Mike Crapo (R-Idaho) and Senate Homeland Security and Governmental Affairs Committee Ranking Member Rob Portman (R-Ohio) are introducing legislation to recover funds from unchecked unemployment fraud and provide incentives for States to recover fraudulent payments. 

The “Chase COVID Unemployment Fraud Act of 2022” would jumpstart efforts to claw back federal funds and pursue recovery of fraudulent payments by ensuring aggressive identification, investigation and prosecution of criminal fraud in pandemic unemployment programs.  Republican Leaders in the House, led by House Ways and Means Committee Ranking Member Kevin Brady (R-Texas), introduced identical legislation on June 9, 2022.

“The Administration needs to step up and join us in detecting and preventing the massive fraud in federal unemployment insurance programs that we have seen, including systemic fraud, internationally organized criminal fraud rings, and other threats to our systems, programs and the federal budget,” said Ranking Member Crapo. 

“The fraud associated with pandemic unemployment programs reached staggering levels,” Ranking Member Portman said.  “Billions of hard-working Americans’ taxpayer dollars that were meant to help out-of-work Americans instead went to criminals and cheats.  This legislation will give the states the incentives and tools necessary to recover this stolen money.” 

In addition to Senators Crapo and Portman, the bill is co-sponsored by Senators:

Marsha Blackburn (R-Tennessee)

Mike Braun (R-Indiana)

Bill Cassidy (R-Louisiana)

Susan Collins (R-Maine)

Steve Daines (R-Montana)

Deb Fischer (R-Nebraska)

John Kennedy (R-Louisiana)

James Lankford (R-Oklahoma)

Roger Marshall (R-Kansas)

Jim Risch (R-Idaho)

Mitt Romney (R-Utah)

John Thune (R-South Dakota)

Pat Toomey (R-Pennsylvania) 

Background:

• The White House estimated that 19 percent of total COVID unemployment insurance payments were lost to fraud--offering a low estimate of roughly $80 billion.  By contrast, the Department of Labor’s estimate puts that number much higher. 
• In May 2022, the Washington Post reported that an estimated $163 billion were siphoned away by fraudsters, and that if the government’s best estimate is accurate, only 2.4 percent of wrongful payments have been recovered. 
• Last year, Senator Crapo and Representative Brady introduced similar legislation, the “Combatting Covid Unemployment Fraud Act of 2021,” to prevent fraud in COVID unemployment programs, recover fraudulently paid benefits, and provide relief for taxpayers and victims of unemployment fraud.
• Senator Crapo and Representative Brady also sent a letter to Labor Secretary Walsh urging Walsh to devote significantly more funds to the detection and prevention of unemployment insurance fraud, given the amount of fraud occurring in the unemployment programs nationwide. 
• Senator Crapo and Representative Brady have also urged the Government Accountability Office to investigate the scope and severity of fraudulent activity in COVID unemployment insurance programs.

For bill text, click here.

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