COVID Unemployment Fraud May Exceed $60B

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Facts

• A new report from the US Government Accountability Office (GAO) estimates that pandemic unemployment benefits fraud exceeded $60B, with $8.5B of that amount coming from defrauding the regular unemployment insurance program.¹
• The GAO extrapolated a lower-bound estimate to assume that 7.6% of all unemployment claims are fraudulent, making the $60B estimate a conservative one.²
• An earlier report from the GAO said that the improper payment rate may have been 18.9% during the pandemic, meaning the actual amount of fraud could be substantially higher.³
• Congress established four additional new unemployment insurance programs during the peak of the pandemic to complement the state-administered programs. The federal government paid out more than $878B from April 2020 to September 2022 to supplement the states’ benefits.³
• This report emerges as the House Oversight Committee, which was recently taken over by Republicans after they won a majority in the November midterms, is planning to hold hearings on the fraud issue beginning Feb. 1.³

Sources: ¹The hill, ²Daily Wire and ³Reason.

Narratives

• Democratic narrative, as provided by CNN. COVID caused a historic upheaval of the US economy, and something needed to be done to support Americans who lost work. The states and Congress did what they could to prevent fraud, but obviously it was a momentous task. The government has learned how to deal with a situation that will hopefully not come up again.
• Republican narrative, as provided by Federalist. Paying people to stay home was always bad policy, but the Democrats couldn’t see past the opportunity they had to buy Americans' votes. Now the US will be bearing the costs of all the fraud for decades to come.