Remarks from Chairman Smith to Rules Committee: HR 1163, the Act to Protect Taxpayers and Victims of Unemployment Fraud

As prepared for delivery.

“Thank you, Chairman Cole and Ranking Member McGovern for the opportunity to speak on this pivotal piece of legislation that will protect taxpayers and victims of fraud from the largest theft of taxpayers’ money in US history.

Americans’ identities and benefits were stolen from them as criminal organizations and foreign fraudsters exploited the pandemic to steal hundreds of billions of dollars intended to keep workers afloat during an economic crisis.

“Appearing before the Ways and Means Committee, the Department of Labor inspector general warned that taxpayers may be lurking for at least $191 billion in improper payments. Outside experts estimate a much larger number at $400 billion.

“Both amounts are unacceptable.

“With hundreds of billions of dollars in unemployment benefits potentially misused or stolen, people in need were left to fend for themselves. While working Americans tried to get their lives back on track, Congress under Democratic rule did nothing to fight fraud as it happened. When the Democrats had the majority on Ways and Means, they ignored, blocked and shot down the common sense safeties, and refused to hold hearings on this fraud.

“And for all the talk from the Biden administration, they have dropped the ball to go after fraudsters. During his first State of the Union address, President Biden said the watchdogs are back. Since then, his chief prosecutor for COVID fraud pandemic has resigned and the position remains vacant.

“That is not a responsibility.

“We couldn’t afford to do nothing for two years, and we can afford that even less today.

“The Protecting Taxpayers and Victims of Unemployment Fraud Act takes much-needed overdue action to recover fraudulently paid COVID benefits, prevent future fraud and prosecute the criminals responsible.

“It allows states to retain 25 percent of fraudulent federal funds that they can then use to improve UI program integrity and fraud prevention, providing real incentive for states to continue investigations and prosecutions.

“With these dollars, states can hire investigators to go after criminals to recover fraud payments, modernize identity and income verification systems, and deter, detect, and prevent improper payments. Included in these reforms are policies supported by the Department of Labor’s Inspector General and in previous budget requests from both President Trump and President Obama.

“We are also stopping UI payments to incarcerated and deceased individuals.

“Finally, we are extending the statute of limitations for prosecuting fraud from five to 10 years, as recommended by the Pandemic Response Accountability Committee in testimony to Ways and Means.

“The amendment being offered today alongside the underlying bill adds an extra layer of protection for states. While this bill should result in an increase in the resources states have available to pay future UI claims, as improper payments are reduced, the language is needed to meet the inability of congressional scorers to collect savings. estimate through enhanced program integrity measures.

“After years of pressure from Republicans, even President Biden has included several of the same fraud recovery and prevention measures in this bill in his Fiscal Year 2024 budget request. I am hopeful that the House Democrats will finally take a similar move to protect taxpayers and pass HR 1163 to support.

“Thank you.”