Unemployment Benefits Fraud - $19 billion Nationwide
The Real Time Economics blog of the Wall Street Journal reported Wednesday evening that based on new U.S. Labor Department data, “(n)early $19 billion in state unemployment benefits were paid in error during the three years that ended in June.” (HT Via Media blog at American Interest.) The newspaper went on to report:
“The amount represents more than 10% of the $180 billion in jobless benefits paid nationwide during the period. (See a sortable chart of each states’ overpayments) The tally covers state programs, which offer benefits for up to 26 weeks, from July 2008 to June 2011. Layers of federal programs that help provide benefits for up to 99 weeks weren’t included. (link added)
“The figures were released Wednesday as the Obama administration promotes its bid to reduce waste at federal agencies. The federal government foots the bill for administering the programs, and states are supposed to pay for the benefits. Many states exhausted their unemployment insurance trust funds during the long recession and slow recovery, prompting them to borrow from the federal government to replenish their funds.”
The Journal also reported the Department of Labor has “launched a plan to crack down on the improper payments, targeting Virginia, Indiana, Colorado, Washington, Louisiana and Arizona in particular for their high error rates.” Virginia’s three-year error rate was 16.9%, which was 62.5% above the national average of 10.4%.
Walter Russell Mead concludes his blog post, saying:
“Some of the violations are technical rather than substantive, but it’s clear that many state governments aren’t doing their jobs. Uncle Sugar isn’t made of money these days, and $20 billion is a lot of money to fall through the cracks. States that can’t be bothered to stop fraud and abuse in their unemployment programs should have their funds cut; the threat alone would ensure better accounting.”
It's hard to add anything more to that!
Additional news reporting: 1) In Niagara Falls, the deputy director of the city's clean neighborhood program "pleaded guilt to a single count of petit larceny, according to the Niagara Gazette on 9/15/11; 2) the state of Florida will be getting "$2.3 million to fight unemployment benefit fraud," reports the Sun-Sentinel on 9/15/11; and, 3) the federal government will "pump" $191 million "for modernizing unemployment insurance programs and detecting fraudulent payments," reports Government Technology.