Critics fear Biden revival of pandemic program with high improper payment rate
Haisten Willis
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The White House could revive elements of a pandemic-era program that has drawn scrutiny for improper payments with the 2024 presidential election ahead.
The Department of Labor released a report in late August on expanded unemployment benefits doled out at the height of COVID-19 lockdowns, of which more than one-third were deemed improper.
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Unemployment benefits typically go to people who were employed full-time, but from March 2020 to September 2021, they were expanded to include independent contractors, self-employed workers, and people who didn’t work enough hours to qualify previously. Known as the Pandemic Unemployment Assistance program, it included more than $100 billion in payments, many of which were later deemed inappropriate.
“The Department [of Labor] has reported to the Office of Management Budget that the PUA program had a total improper payment rate of 35.9 percent,” the report reads.
Though the report notes that some of those payments simply couldn’t be established as valid and 1.5% were underpayments, the White House’s critics say it’s a damning number.
“The report buries the fact that this program was deeply abused,” said Matt Weidinger, a senior fellow at the American Enterprise Institute. “And they also buried the fact that they want to revive the program.”
Weidinger cites not only the report but also President Joe Biden‘s budget proposal as evidence that the White House hopes to bring the program back.
Biden’s budget doesn’t mention PUA specifically but does mention “improving benefit levels and access” to unemployment insurance and “expanding eligibility to reflect the modern labor force.”
The White House denies it’s looking to revive PUA.
“The president’s budget does not propose reviving the temporary, emergency Pandemic Unemployment Assistance program,” White House spokesman Michael Kikukawa said. “Rather, it calls for long-term, comprehensive reform of the unemployment insurance system to reflect the modern labor force, including expanding eligibility to workers who are left out of the system.”
Kikukawa stressed that Biden’s proposal would also include money to crack down on fraud and identity theft, saying that could help recover money that was “lost to fraud under the Trump administration.” But he did not spell out exactly how eligibility would be expanded and who would qualify who didn’t before.
Weidinger says Biden is calling for the same parameters as the troubled pandemic program.
“They want to revive PUA, even if they don’t use those exact words,” he said. “You don’t have to be much of a sleuth to know what they’re talking about.”
The Labor Department also says most improper payments occurred during the program’s first nine months, when it was run by the Trump administration, and that afterward, safeguards were implemented, including increased identify verification, improved data share, and more resilient information technology systems. The Department of Labor cited funding from the $1.9 trillion American Rescue Plan as going toward shoring up the program’s safeguards.
“These funds represent a much-needed down payment on the upgrades and reforms needed by state systems to protect against fraud and reduce errors now and in the future,” the report reads.
Still, some of those errors were substantial. Reports circulated of a Nigerian fraud ring that made off with hundreds of millions of dollars. California temporarily suspended applications to its program in September 2020 due to a sudden jump in applications and later said PUA was responsible for the vast majority of fraud that occurred during the pandemic.
House Republicans held a hearing in February calling PUA “The Greatest Theft of Taxpayer Dollars.”
The report acknowledges there was a high level of fraud in PUA’s early days but does not list an amount that was improperly paid or the total number of recipients. Questions sent to the Department of Labor were not returned.
Expanded unemployment benefits are popular with some left-leaning members of Congress.
Leading Democrats, including Sen. Ron Wyden (D-OR) and Rep. Adam Schiff (D-CA), called in April 2021 for making PUA permanent. The Washington Examiner has contacted each to ask if they still support that proposal and if they have concerns about improper payments.
Congress would need to agree to expand unemployment benefits, which will prove difficult with Republicans in charge of the House.
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Critics such as Weidinger say the report doesn’t do those efforts any favors.
“It struck me as very curious that the administration would report this very large number [of improper payments] in minimalist fashion,” he said, “while also calling to revive that very same program in the future.”