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Bad News for Taxpayers As They May Have To Pay $32 Billion Unemployment Fraud

Bad News for Taxpayers As They May Have To Pay $32 Billion Unemployment Fraud
Source: Pinterest

Bad News for Taxpayers as They May Have to Pay $32 Billion Unemployment Fraud

Source: Pinterest

In a recent occurrence, the Biden administration is shouldering the blame for a job fraud issue. This could eventually lead to taxpayers in the US paying an astounding $32 billion.

Julie Su, Biden’s labor chief, worked as California’s senior labor regulator throughout the COVID-19 outbreak. During that period, most of the forged payments occurred, and as such, she bears some guilt for the massive cost.

What Happened During the Pandemic

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The federal government launched a number of relief measures during the COVID era to alleviate economic distress, which cost over $5 trillion.

Various initiatives improved the lives of millions of Americans and companies. Some of them were the Federal Pandemic Unemployment Compensation and the Paycheck Protection Program.

Fraudulent Reports

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Reports within recent years have shown that a large number of Americans opted to apply fraudulently. They did that in order to take advantage of the programs.

There was a report published this year, and in the report, the Government Accountability Office estimated that throughout the epidemic, unemployment fraud cost around $100 and $135 billion.

California was not Left behind

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States like California were hit the hardest. Up to $33 billion in forged payments were made there.

Republican senators are concerned. They believe that the funds appropriated from the American taxpayers will be utilized to reimburse employment fraud.

ALSO READ: 12 Reasons Why Americans Don’t Like California Anymore



They are taking Actions

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They believe that the Labor Department regulations released in December would permit California to defer the effects of an undetermined amount of dollars.

They are of the opinion that the Labor Department regulations released in the month of December would permit California to defer the effects of an undetermined amount of dollars.

Billions were Paid

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Although the exact sum is still unknown, the Government Accountability Office estimates that around $32.6 billion were made in California alone.

This roughly doubles the annual budget of the U.S. Department of Labor.


How Big the Scam Really Is

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The California State Controller added that the state had limited oversight over the reporting for federally sponsored programs. Thus making it challenging to determine the actual scope of the fraud.

According to their analysis, California’s financial reporting for federally financed unemployment insurance benefits was not adequately under control.

POLL—Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality?


Senators share their Thoughts

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Each US state has some discretion regarding choosing to forgo or return cash that was stolen. This is thanks to guidelines that outline how different states are to reclaim such funds.

Crapo and Cassidy appeared before the House Education and Workforce Committee earlier in May. They gave an oral testimony. They further clarified that Su’s earlier assertion that states may only “waive non-fraudulent overpayments” was incorrect.

Further Claims

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The senators cited Su’s choice to forgo verification procedures, and this would have stopped fraud. This was in the letter they sent out a few days following the appearance.

“While serving as Secretary for the California Labor & Workforce Development Agency (LWDA), you waived basic fact-checking and fraud prevention requirements for federal pandemic-related unemployment insurance (UI) payments,” the senators wrote.

ALSO READ: Former California Senator Recounts Story of President Who Deported One Million Mexican Immigrants Nearly a Century Ago


They received Numerous Precautions

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The senators claimed that Su’s activities were in direct opposition to the policies established by the US Labor Department. That’s not all; California’s auditors also implied that it had sent the EDD “repeated warnings.”

Yet, months into the pandemic, the department did not step up its attempts to recognize fraud. They also abandoned an important precaution.

Counter Arguments

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The EDD however holds a different view. They claim that measures were taken and that every conceivable effort was made to recover the money that was lost to scammers.

If the revised labor department standards are accepted, the EDD contended, the department will be pardoned for their attempts to recover the monies.

The state's Accountability

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Su is nevertheless being probed by Crapo and Cassidy. They are asking her a series of inquiries in an attempt to get a clearer idea about how culpable the Golden State is.

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