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tv   Inspector General Testifies on COVID-19 Spending Fraud - Part 3  CSPAN  February 2, 2023 12:32am-1:17am EST

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substantial amount of money in a short period of time so one of the things that we did at the beginning of the pandemic and prior was to share information indicators of compromise to be seen at only from other and criminals themselves as a law enforcement entity we do work with criminals and confidential informants and give information regarding the tactics. >> the committee thinks all three of you for being here today and doing a great job answering questions. at this time we will posit and change of the panel. [inaudible conversations]
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>> the committee will come back to order for the second panel the executive director of the national employment law project welcome to the committee. please stand and asia right-hand. do you swear or affirm the testimony you are about to give is the truth, the whole truth and nothing but the truth to help you god? let the record reflect the answer on —- the witness has answered in the affirmative. without objection your written statement will be a part of the record you are recognized for five minutes for your opening statement. >> good afternoon chairman and members of the committee thank you for the opportunity to testify today and the executive director of the national law project nonprofit organization that for more than 50 years have sought to strengthen protections including those who are unemployed. the terrible hardship imposed
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on workers in those nationwide and by april 202,020,000,000 workers were unemployed congress stepped up to pass a bill that literally stayed lives and livelihoods and prevent what could have been a prolonged and devastating economic collapse the policy response help to make the shortest on record that has brought the unemployment rate of 14.7 percent in 2223.5 percent today indeed according to moody's analytics coming to a double-dip recession a combination of well-designed social insurance programs trying to the lowest on record cutting the number of poor children by half keeping 25 million out of poverty. that was the pandemic
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unemployment insurance program that not only contributed to historic reductions in 2020 and 2021 but also broadly supported filling in the substantial gaps you are particularly affected by getting money into the hands of consumers who need and will spend it quickly to support businesses and communities to stabilize the states economy. unfortunately a decades long failure to properly invest made the appealing target for organized crime during the pandemic chronically underfunded and understaffed operating with antiquated technology implementing a major with little advance preparation is resulted in multiple points of vulnerability which has stolen the identities of workers during the data breach.
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and those to fraudulently obtain those benefits as a temporary federal pandemic program the state agencies were not able to protect against identity fraud as detailed in written testimony the department of labor has had a notable success with national fraud prevention solution from the american rescue plan making a substantial investment to detect and prevent future identity fraud with equity grants and it modernization system all combined with improving access to eligible workers to contact fraudulent activity. with that system support for state fraud protection defect and the integrity data had has
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cost significantly since the pandemic using the identity verification service and recently launched bank account service to support id fraud by verifying a bank account from those with the benefit they can no longer bring in contractors to help run the program as they were giving emergency flexibility to do so at the height of the pandemic gao noted a major cause of increased fraud is the insufficient neighbor on —- number of staff and then to be undertrained. although intended to handle increasing claims and experienced in those through no fault of their own contributed to increased fraudulent activity creating greater obstacles for those seeking benefits. as for the outdated it system congress has divided much need increases in federal funding for the administration and
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technology modernization over the past few years congress must continue making investments because sophisticated criminal enterprises seek the vulnerabilities in the state agencies to keep pace. in conclusion the pandemic combined to a critical lifeline for workers, families and communities and in the nation's economy of the committee will recognize the tremendous value to work together to find meaningful solutions with the problems of identity fraud that has undermined the effectiveness. thank you. >> the chair recognizes the gentle lady from ohio. >> this is the first committee hearing and on a bipartisan basis find ways to strengthen
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i truly want to work with my colleagues on both sides of the aisle to make life better for all constituents including mine back in back home in ohio. i want to share some real life stories of people in ohio who have benefited from some of the lifesaving pandemic relief programs we are discussing today. here is an example. "i was laid off on march 132020 even though it took a month to receive my unemployment benefits i am so thankful. without them my family of four word not have anything at all coming in. the extra federal money per week is all i need to pay my bills to help provide for my children in such a traumatic situation. the testimony is just one example among millions and all
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our districts for whom the federal assistance made all the difference. mystics and how they covid-19 relief legislation such as the bipartisan c.a.r.e.s. act and the american rescue plan protect american families from disaster quick. >> the economy is 70 percent with consumer spending drives the economy and the 23 million workers out of work that enormous contraction now spending with the double-dip recession and it prevented hunger and homelessness and allow families to focus on caregiving for their sick family members and it was just a lifeline a critical important way that congress
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can do with working families. >> thank you very much. >> it is clear they took decisive action to provide and the critical and much-needed investment have the economic programs are helping the country recover and bounce back with the worst pandemic in recent memory so let us not forget and then to be much stronger than ever and with that mr. chairman i yield back the balance of my time. >> the chair recognizes the gentle lady from vermont. >> first of all thank you as you know ms. dixon in march and april of 2020 we experienced an unprecedented economic shock 22 million last
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her jobs, million suddenly found themselves without an income and april 2020 when i was a leader in the vermont senate we saw vermont seasonally adjusted unemployment rates it is up 12 percent from the year before. thankfully congress stepped in to help us expand the unemployment insurance and as you have said it was an absolute lifeline for families and individuals. without the unemployment insurance programs house with individuals and families be able to respond and with those individuals and families to stay afloat. >> is not necessarily well-known but the unemployment insurance is the first step against poverty and
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homelessness the only universal cash program that we have that there is nothing else and what we saw in the great recession and with the snap program. and then to stress how critical the program is meant to maintain while they search for work. >> i appreciate that distinction. we cannot overstress it and to work directly with individuals with thousands of vermonters and that is exactly what i was hearing from him constituents. and then it changes when the individual benefits with the unemployment insurance
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benefits. >> the benefit has important qualities that it allows workers to match the jobs that match their skills. so the thing that was offered to them because it gives them the breathing room to find a good match close to the salary they were receiving before they lost her job. >> i would assume with the skills going unused they are much likely to stay in the job so exacerbating the cycle is not good for employers and employees and is that the case? is there a connection. >> and then in those
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industries that were hardest hit in the pandemic like the service industry where workers have left the industry entirely to go to others because of better conditions and better pay. and then to stay and not job it's important to them and their families just as important just ability in the role they are in. >> from your perspective and research with the work you do in your position and then to modernize state unemployment insurance system? so we like to hear from your perspective why it is so important. >> i did a report that was a deep dive on the unemployment
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insurance and the impact it's a on —- to pay benefits. the net benefit it system was 26 years old. that was ten years ago. guilds was 46 years old and it's critical to invest that usually when there is a crisis like the pandemic there is investment in the it system but it is seen as the economy recovers we take the foot off the gas so we need to make the changes needed so the system is functioning all the time whether one family suffering or millions. >> the chair recognizes the gentle lady from missouri. >> we are here in support of a
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government that ensures no one lives in poverty. between march and april 2020 the us economy lost more than 22 million jobs. the unemployment rate dropped from 2022 the pandemic peak unemployment rate of 14.7 percent april 2020. st. louis families and families all across the country were in need of emergency assistance during those uncertain times. when such stories shared by the national employment project comes from our constituents a single mother from st. louis who said if it wasn't for unemployment i would have been put out of my apartment. think god for the help. still trying to get myself out of debt but the pandemic unemployment gives me and my son a little security. a single parent getting no help plus losing my job. so it has definitely been a blessing. the c.a.r.e.s. act created a
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temporary unemployment insurance program caused in signing the rescue plan into law and other temporary unemployment insurance benefits the p wave marked unemployment insurance benefits to workers and families who were otherwise excluded from other ui programs it was the difference between a full dinner table and an empty one for a number of families. mystics and, who benefited the most from these programs and can you tell us why? thank you for being here. >> the unemployment insurance program created 80 plus years ago and not modernized and was created on the foundation why is that white male
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breadwinners so the foundation that's mostly benefits. so women workers or those who work part-time or and restaurants and service jobs where wages are low are entirely left out of the program and most workers in good jobs are also excluded. as the workforce has changed over time, many workers have been left on the sidelines and in particular women and workers of color. adding this program actually invited them into the program some for the first time in their working life. >> thank you. in august 2020 the department of labor announced it would distribute up to $260 million in grants for states to address disparities with the state unemployment insurance and promote equitable access to benefits.
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mystics and how has the department of labor equity grand impacted local communities across the country quick. >> one of the most critical things to understand when folks are doing this work they want to pay benefits they are not standing in the way they are working really hard when they are understaffed and under invested and one of the things the equity grant program has helped us for those folks to understand the impacts the way the program is designed it's not necessarily the individuals and the actions they are taking but the system and how they need to change what they do to offset those inequities and that's a critical piece for states to take to heart as they work to serve unemployed workers.
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>> sadly republicans are so focused on cutting programs to benefit regular everyday people that it is impossible to take the criticisms of these programs seriously. we need to ensure funds are used properly and then expand these programs permanently democrats will continue to lead the bold legislation that tackles our nations crisis while advancing equity and equal opportunity. thank you and i yield back. >> the chair recognizes the gentle lady from pennsylvania. >> thank you for your testimony and the last panel we discussed my time at the state legislature where we heard intimate struggles of americans throughout the pandemic they often have to choose whether to pay their rent for our childcare that these conditions are unacceptable.
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and to approach unemployment differently is there an ideal state system we can learn hear from congress? >> rather than the ideal state system of congress could do is create a universal baseline with federal standards every state has to meet right now depending on the state you can receive a benefit as low was $235 a week maximum are eligibility for as low as 12 weeks of payment as opposed to 26 weeks and other states. that doesn't make sense we have a patchwork of programs if we really want to make sure we are serious about coming through for unemployed workers when they need us the most so having a baseline of standards with a minimum of 26 weeks all states have to pay with a minimum number of dollar amounts that there is a
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minimum set of eligibility standards to fit all workers. we need and the extended benefits program that turns on automatically so that workers are not waiting for congressional action that rely on the programs. >> talking about how what benefited more from these programs can you elaborate on the disparate impact as you see here on —- share in your testimony quick. >> our labor market is very stratified so women make up the largest portion of low-wage workers and people of color and those have hit hard in the pandemic they lost their job but because of history they also have wealth accumulated in savings of the
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fact is that congress took action so quickly and to get the money out the door they have met a lot of folks who do not have savings to rely on and for whom the program made a difference to pay rent and stay in their home. >> lastly where would we have been without these programs? with the millions of individuals who rely on these programs during the pandemic? >> we would've had incredible child poverty and in the sunol me and many other ills we were able to avoid and that word is great for children and families and communities and congress really came through for the working people to feel the positive effects of her generations and it's very hard on children and the parents if they don't have income. so there was a pay off just
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beyond the actual monetary amount that we would be reaping the benefits for generations to come. >> with that i yield back. >> thank you for being here with us today. i am from new york state experiencing the first covid-19 case march 1st 2020 and i actually got covid myself march 10 very early. new york was at the epicenter of the pandemic at the beginning more than 70000 new yorkers have died as a result. families in new york and during record unemployment the unemployment insurance system became a lifeline to nearly 5 million new yorkers.
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in my district organizations like the chinese-american planning council connected at least 740 households with unemployment insurance nearly 2000 families with housing assistance and 1300 people who were excluded from federal relief new york city's innovative immigrant emergency relief program and ashes one outstanding organization of many. when covid searched and 22 million lost their job it fell to the unemployment insurance system to take on the immense volume of the claims the heart the flavor distributed more than $105 billion which is the equivalent of 50 years worth benefits in two years from the start of the pandemic that obviously the new influx of benefits opened itself up to fraud through identity theft online which you have spoken
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about. then he asked a department of labor has recommended congress provide sustained investment of additional forces to help states combat the ever evolving threat of cyberfraud. i am curious, what do you think congress should do to assist states separate from the federal baseline that you talked about? where were the resources be most effective to modernize and upgrade unemployment insurance systems? >> echoing folks from the first panel the information technology investment is critical we have a decentralized system with 53 different unemployment insurance programs so there are 53 opportunities to attack the system. so we need to make sure they
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are staffed. so we need to create a program. >> thank you of the most productive and effective measures was the child tax credit. love for you to talk about the success of the child tax credit and why it was so successful at reducing child poverty. >> one piece of it was that many went into families make
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accounts with you add that with the unemployment insurance payment you have families actually getting cash to meet their needs at a critical time and we see that and the reduction of poverty and what a huge impact that was for families and children all over the united states. >> you are drawing a distinction between the earned income tax credit which comes when you pay your taxes as opposed to cash and direct deposit into by check. >> but that child tax credit is not paid on a monthly basis. the way it works in this instance so generally it is something that either folks are changing the tax withholding account or waiting until they file their taxes to get it. what was revolutionary is actually giving the cash in the families bank account. >> can you talk about how
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important the child tax credit was to underserved communities and people of color in particular? >> and so to make sure that children have a they needed it is critical and it would've been critical at any time but especially critical during the pandemic and it would be great if congress could figure out how to reinstate it because the impact was phenomenal for families. >> and i yield back spent the chair recognizes the gentle lady from new york. >> thank you, mr. chair. it can be difficult to remember given all that has happened in the last three years we like to envision ourselves back to the pandemic in the spring of 2020.
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in march and april the economy lost more than 22 million jobs and data shows these benefits cost approximately five.5 million people out of poverty in 2020. im curious about from your vantage point how expanded unemployment insurance played out as a vital lifeline for workers in states during the pandemic. >> one of the reasons congress put in place the program is because the unemployment insurance is an adequate and how much the benefit amount so
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in congress added $600 per week and then 300 that was amazing. especially in states where the national average benefit is only $300 a week. this made it possible for folks to stay in their homes , they didn't have to choose between food and gas. it was critical. so we have to learn. we talk a lot about instances with identity theft and fraud. but we haven't talked about the number and what that meant for them and their ability to see attached the workforce. we have to mind the data on the good pieces and carry forward of congress can do to carry the pieces forward as a minimum standard to implement. >> so for so much there is a
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constant focus not just being fraudulent or wasteful that a fixation on the employment program which as you state if not for the federal supplemental program families would have been potentially and during months of unemployment and having to just get by on as little as $300 a week. especially with the skyrocketing how one —- cost of housing without that federal response to dramatically expand the housing security and the people who may be struggling with homelessness if not for that supplemental. >> absolutely because even though there were things that congress created that were housing supplements it could
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take a while to get out and it is the quickest way to get money into the pockets of workers. i did have a critical influence tuesday and homes and to pay their rent and there was that the eviction moratorium but sitting there with $10000 of back rent they cannot pay. it kept them going in a way to make sure they were not incurring debt just to do the basic living expenses. >> despite experiencing the worst job last the united states has experienced since the great depression during that period the covid-19 recession was the shortest on record. to expand on that point how do these relief programs
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particularly unemployment insurance help stabilize the economy from a more macro perspective? >> because much of the economy is based on consumer spending, that's the first thing families cut back on. we know it is the on virtuous cycle and a contraction and it gets worse and worse. the program did when it was designed to do to stabilize the economy and communities and prevent the downward spiral and prevent a double-dip recession which we had experience with not that long ago and just to get through this pandemic without the protracted high unemployment rate. >> thank you kindly and
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welcome. i have a question triggered by something that you said which is why did the unemployment insurance system grow up in a way that is decentralized instead of one national problem are - - program quick. >> the reason is because in the 1930s they would not have approved a program of that nature there were actual proposals to make it universal to make it paid for out of general fund dollars and that was not adopted because the southern states do not want black people in particular to have access to this program they wanted the control to decide who qualifies and who does not.
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>> to my mind it's like 50 different social security programs are 50 different medicare programs. and we have just been through period were we have seen the brokenness of the system to be decentralized. thank you for clarifying that. the bottom line is an expanded unemployment insurance even with dysfunctional antiquated systems to fill in those financial gaps of unprecedented difficulty can you share a few examples of how an expanded benefits of people you work with quick. >> although we don't directly represent workers those who don't know that they can refer them to legal representation
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but it is very satisfying the e-mail you get from a workers how grateful they are that this program ended and they can focus on their family and their livelihood so getting those e-mails makes you want to show up every day to do this job so they were organizing around these benefits to be active and engaged and critical and phenomenal to have these benefits to create those basic needs once in a century crisis. >> don't take your foot off the gas to provide support for
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those ac systems. on behalf of working people are grateful for the way congress came through and hope with what you heard today from me and the other panel will take seriously the need to invest in the infrastructure of the program so you can function well without congress having to step in when there is a crisis or a personal crisis were family. >> . >> i yield back related use of five subcommittee chairs on behalf of the chairman the congress will chair on cybersecurity in government innovation and congressman will chair the subcommittee and economic growth and energy
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policy and regulatory affairs and pete sessions will chair the subcommittee on operations of the federal workforce and mclean on financial services and healthcare and the subcommittee and national security and the board he border and foreign affairs i yield to the ranking member. >> thank you very much the ranking member on cybersecurity 18 government and the subcommittee growth energy policy and military affairs and the ranking member government operations in the workforce. and the ranking member financial services and ms. porter the ranking member national security for foreign affairs. >> i ask unanimous consent it is approved and enclosing onto think our panelist once again for their testimony and onto
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think their colleagues for the first oversight hearing go to the heart of the jurisdiction protecting taxpayer dollars from fraud and waste and abuse and without objection all members will have five legislative days to submit extraneous materials and submit additional written questions that is forwarded to the witnesses for a response and we are adjourned. [inaudible conversations]
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