WASHINGTON — House Republicans passed a symbolic bill Thursday that would clamp down on unemployment insurance fraud.
And one of the bill’s sponsors, Rep. George Santos (R-N.Y.), demonstrated the need for the legislation by getting indicted for unemployment insurance fraud this week.
“It just shows that unemployment fraud is real, and this is why we need to pass this,” Rep Jason Smith (R-Mo.), chairman of the House committee that oversees unemployment, told HuffPost.
The legislation, which is unlikely to pass the Senate, would give prosecutors more time to bring fraud charges against bogus unemployment claimants and create stronger incentives for state workforce agencies to claw back bogus benefits.
More controversially, the bill would also repeal fraud prevention funds Democrats provided to state workforce agencies as part of the American Rescue Plan in 2021. Republicans want to use the $400 million remaining from the original $2 billion appropriation to offset the bill’s cost.
Repealing the anti-fraud money, Democrats said, meant the bill would do the opposite of what Republicans claimed ― and that it would stifle efforts to catch people who fraudulently file for benefits like Santos allegedly did.
“These Democratic anti-fraud dollars helped the Department of Labor create an important cross-checking system to catch fraudsters who apply for unemployment in one state while receiving income in another, a practice for which a Republican House Member reportedly was indicted earlier this week,” Rep. Danny Davis (D-Ill.) said on the House floor.
The U.S. Labor Department said in a February letter that repealing the money would “throttle essential, ongoing efforts to strengthen and protect the UI program from fraud.”
Smith brushed off those claims, saying the bill “should incentivize states to go after more fraud,” not less.
Unemployment fraud exploded after Congress expanded eligibility and boosted benefit amounts in response to the onset of the coronavirus pandemic in 2020. The Government Accountability Office has estimated that criminals stole at least $60 billion from the new programs, sometimes by using personal information from innocent people who would later get stuck with surprise tax bills.
Federal and state prosecutors have accused Santos of illegally filing for benefits in 2020 even though he had a high-paying job at the time. The charge is part of a 13-count indictment accusing Santos of spending campaign money on designer clothing and lying to Congress about his income.
The government said Santos fraudulently obtained nearly $25,000 in benefits in New York despite earning a six-figure salary as the regional director of a Florida-based investment firm.
After pleading not guilty to the charges against him, Santos suggested Wednesday that the unemployment charge may have resulted from a mixup because he had switched jobs.
“My employment was changed during the time,” he said. “I don’t understand where the government is coming from.”