Hoosier State Today

U.S. Senators Todd Young (R-Ind.), James Lankford (R-Okla.), Mike Crapo (R-Idaho), Bill Cassidy (R-La.), and Marsha Blackburn (R-Tenn.) have addressed a letter to Acting Secretary for the U.S. Department of Labor Julie Su and Assistant Secretary for Employment and Training Administration José Javier Rodríguez, highlighting the issue of rising unemployment insurance (UI) fraud and advocating for state-level prevention measures.

"We write to advocate for state unemployment insurance (UI) agencies and to support their efforts to prevent fraud. The COVID-19 pandemic proved that the nation’s UI system adapts quickly to support unemployed Americans during periods of exceptional hardship. Due to business closures and stay-at-home orders, the number of initial claims and continued claims rose quickly at the beginning of the pandemic," stated the senators in their letter.

The senators emphasized that as claim volumes increased, so did the burden on states to detect fraud. "The number of fraudulent claims skyrocketed as states received more claims. The Government Accountability Office (GAO) estimates that between 11 and 15 percent of all pandemic-era UI benefits, or $100-$135 billion, were distributed fraudulently…We look forward to working with you and encourage the Department to prevent fraudulent actors from stealing taxpayer dollars," they continued.

Previously, Senators Young, Lankford, and Crapo had sent a letter to Attorney General Merrick Garland and Department of Labor Secretary Marty Walsh requesting an update on efforts by the Biden Administration to recover fraudulent benefits obtained through temporary COVID-19 unemployment insurance programs. Additionally, Senators Young and Crapo introduced the Protecting Taxpayers and Victims of Unemployment Fraud Act aimed at recovering funds lost due to UI fraud and providing incentives for states to reclaim fraudulent payments.

The letter further detailed that nationwide initial claims rose dramatically from 251,875 during the week ending March 14, 2020, to 2.9 million during the week ending March 21—a 1,157 percent increase—reaching 6.1 million by April 4, 2020.

The Department issued Unemployment Insurance Program Letter No. 16-21 during the pandemic to highlight identity verification's importance but allowed only a brief pause in payments for suspected fraudulent claims before resuming them.

In light of these challenges, the senators requested modifications in existing guidance such as UIPL 16-21 to provide states with greater flexibility in preventing payments to fraudulent actors. They argued that reducing fraud would enable states to invest more effectively in staff training, information technology systems, and best practices for timely benefit delivery.