Skip to main content

We will keep fighting for all libraries - stand with us!

tv   Inspector General Testifies on COVID-19 Spending Fraud - Part 3  CSPAN  February 2, 2023 7:24am-8:06am EST

7:24 am
recently and it was being used to move a substantial amount of money in a short time, that is something you would find. one of the things we did at the beginning the pandemic and prior was sharing information, that we are seeing not only from other entities, from criminals themselves. keep in mind as federal law enforcement entity we do work with criminals, we have informants, we get information from the inside regarding what tactics. >> thank you, the committee thanks all three a few for being here today and doing a great job answering questions. we are going to pause and change out the panel.
7:25 am
>> the committee will come back to order. for our second panel today i would like to introduce miss rebecca dixon, executive director of the national employment law project, welcome
7:26 am
to the committee. please stand and raise your right hand. do you swear or affirm that the testimony you are about to give is the truth, the whole truth and nothing but the truth so help you god? let the record reflect the witnesses answered in the affirmative, thank you. without objection, written statement will be part of the record, you are recognized for 5 minutes for your opening statement. >> good afternoon, ranking member raskin and numbers of the committee. thank you for the opportunity to testify today. i'm the executive director of the nonprofit research organization that for more than 50 years such to strengthen protections and build power for workers in the us including workers who are unemployed. we must never lose sight of the terrible hardship the early days of the covid 19 pandemic imposed on workers, families and communities nationwide.
7:27 am
by april 2020, 23 million us workers were unemployed, congress stepped up to pass bills that created programs that saved lives and livelihoods and preventatives what could have been a prolonged and devastating economic collapse. this robust policy response helped make the covid recession destroyed its own record and contribute to an economic recovery that has brought the unemployment rate to 14. 7% in 2020, to 3. 5% today. indeed, according to moody's analytics without these programs the economy would have succumbed to a double dip recession. a combination of well-designed social insurance programs brought poverty to global level on record in 2020 one, cutting the number of poor children by nearly half and keeping 25 million out of poverty. one important piece of the protections enacted by congress not only contributed to the historic reduction in poverty in 2020, 2 and 2020 one but
7:28 am
also broadly supported recipients financial stability and overall well-being, filling and substantial gaps in the nation's inadequate system. ui is particularly effective at getting money into the hands of consumers who needed and will spend it quickly and supports businesses in their communities and stabilize the state's economy. unfortunately, a decades long failure to invest in the administration of the system made it an appealing target for organized crime during the pandemic are chronically underfunded and understaffed statewide systems operating with antiquated technology, tasked with building and implement in major new federal programs with little advance preparation. this resulted in multiple points of vulnerability for criminal enterprises which previously stole the identities of workers during private-sector data breaches, they seized on the pandemic as a time to fraudulently obtain ui benefits. as a temporary federal pandemic
7:29 am
program had to be built virtually overnight, they were not able to design systems to protect against identity fraud in these programs, as detailed in my written testimony the department of labor has had a notable recent success rate in national fraud prevention and enlisting state participation and made substantial investment in strengthen systems to detect and prevent future identity fraud. the tiger team and modernization systems combined to focus on improving access for eligible workers with resources and expertise to combat fraudulent activity. it also offers a wide range of technical support for prevention detection and recovery. state participation and the integrity data hub and use of crossmatch systems have increased significantly since the pandemic, with more states
7:30 am
using identity verification service, incarceration data exchange and recently launched bank account verification service that enabled states to thwart id fraud and making sure it belongs to the worker claiming benefits. moreover, states can no longer bring in contractors to help run their programs if they were given emergency flex ability to do so during the height of the pandemic. gao noted a major cause of increased identity fraud was the insufficient number of state and staff and new staff that were severely undertrained. although in scented to handle increase in claims, inexperienced and insufficiently trained contractors through no fault of their own contributed to increased fraudulent activity and created obstacles for workers seeking benefits. as for the outdated it system used by so many state programs congress has provided much-needed increases in federal funding for administration and worker technology modernization over the past few years.
7:31 am
congress must continue making these investments because sophisticated criminal enterprises will continue to seek vulnerabilities in state systems, and state agencies need to keep pace. in conclusion, the pandemic relief congress enacted combined to provide critical lifelines to workers, families and communities in the nation's economy. i hope this can he will recognize the tremendous value of covid relief programs, and work together to find meaningful solutions to the problem of identity fraud that has undermined them. thank you. >> thank you, miss dixon, the chair recognizes the gentle lady from ohio, miss brown. >> since this is our first committee hearing of this congress i want to express my hope that this committee will, on a bipartisan basis find ways to strengthen federal programs and serve working people. i truly want to work with my colleagues on both sides of the aisle to make life better for
7:32 am
all our constituents including mine back at home in ohio. in that spirit, i want to share some real-life stories of people in ohio who benefited from the lifesaving pandemic relief programs we are discussing today. here is an example. tiffany from northeast ohio said, quote, i was laid off on march 13th, 2020, even though it took a month to begin receiving my unemployment benefits, i am so thankful for them. without them, my family of four wouldn't have anything at all coming in. the extra federal money per week enabled me to pay my bills and helped me to provide for my children in such a traumatic situation. tiffany's testimony is just one example among millions in all our districts.
7:33 am
for whom this federal assistance made all the difference. miss dixon, how did covid 19 relief legislation, the bipartisan cares act and american rescue plan save american families for disaster. >> one thing we know is the economy is 70% consumer spending. 20 million workers out of work there would have been you norma's contraction of spending which would have been a double dip recession and prevented hunger and homelessness and really allowed families to focus on caregiving for sick family members and it was a lifeline, a critical, important way congress came through for working families.
7:34 am
>> thank you very much. it is clear to me the biden administration and congress took decisive action to provide relief for the american people. the critical and much-needed investments in health and economic programs are helping the country recover and bounce back from the worst pandemic in recent memory so let us not forget that. we are continuing to emerge stronger than ever. with that, mr. chairman, i yield back the balance of my time. >> the chair recognizes the gentle lady from vermont. >> thank you, mister chairman. thank you for being here. appreciate it. as you know, march and april 2020, we experienced an unprecedented economic shock. 22 million people lost their jobs, millions of people found themselves without an income. in april, 2020, when i was a
7:35 am
leader in the vermont senate, we saw vermont's easily adjusted unemployment rate go up to 56%, which was up 12% from the year before, so thankfully, congress stepped in and helped us expand the unemployment insurance and as you said and others have said, it was an absolute lifeline for families and individuals. my question is, without unemployment insurance programs, how would individuals and families be able to respond to such an economic crisis, what happens without these funds to allow individuals and families to stay afloat? >> it is not well-known but the unemployment insurance is the first line of defense against poverty and homelessness, the only universal cash program that provides cash to working
7:36 am
families when they lose their job. there is nothing else. what we saw in the great recession when folks were exhausting their benefits is the other program they turned to was the snap program and there was nothing else and it can't be stressed enough how critical this program is to making sure families can maintain while they search for work. >> really appreciate that distinction. and we can't overstress it. for me, having worked directly with individuals and families, thousands of vermonters, that is what i am hearing from my own constituents. when we think about unemployment insurance programs and how they assist workers in job searches, do job searches change when an individual is benefiting from unemployment insurance benefits? >> the benefit has many
7:37 am
important qualities, one is that it allows workers to match jobs that match their skills so they are not trying to take the first possible thing that is offered to them, which is not good for the economy because those folks feel they are being unused. it gives them breathing room to find a good match that will be close to the salary they were receiving before they lost their job. >> i would assume not only with those skills go unused, but when you have a worker who is mismatched and much less likely to stay in that job, so exacerbating this cycle of turnover which we know is not good for employers, not good for employees or families. is that the case? do we see a connection there with job turnover? >> there absolutely is. we have heard employers loud and clear particularly in some industries that were hardest hit in the pandemic, the
7:38 am
service industry, the restaurant industry where workers have left those industries entirely to go to other industries because better conditions and better pay. if a worker takes a job we want them to stay in that job, advance in that job so it's important to them and their families that is important to employers to have stability in the role they are in. >> one more question. from your perspective, from your experience and research and the work that you do in your position, why do you think we need to continue to invest in and modernize state unemployment insurance? we heard in the earlier testimony how there was a breakdown so we would love to hear from you, from your perspective why that is so important. >> a decade ago i did a report that was a deep dive on unemployment insurance administration and the impact on being able to pay benefits and what i found then was that
7:39 am
the average ui benefit it system was 26 years old, that was 10 years ago and at the time, the oldest one was 46 years old and so it is critical for us to invest, to actually put the money in. usually when there is a crisis like the pandemic, there is investment in unemployment and in the it system and administration, but as soon as the economy recovers we take our foot off the gas, we need to keep our foot on the gas in this program, we need to make the changes that are needed so the systems function correctly all the time, whether it is one family suffering unemployment or millions of people suffering unemployment. >> thank you, i yield back. >> gentle lady's time is expired, the chair recognizes miss bush. >> thank you. lewis and i are here in support of a government that ensures no one lives in poverty. during march and april of 2,020
7:40 am
the us economy lost 22 million jobs, unemployment rate jumped from 3. 5% % in january 2022 a pandemic peak unemployment rate of 14. 7% % in april 2020. families across the country were in need of emergency assistance during those uncertain times. one such story shared by the national employment project comes from my constituent, a single mother from st. louis, who said if it wasn't for unemployment, i would have been put out of my apartment. thank god for that help. i'm trying to get myself out of debt, but the pandemic unemployment gives me and my son a little security. i'm a single parent getting no help from the other parent plus losing my job. so it has definitely been a blessing. the cares act created a
7:41 am
temporary unemployment insurance program, unemployment assistance in 2,020, president biden signed the american rescue plan into law which extended the ua and other temporary unemployment insurance benefits, the poa unlocked unemployment insurance benefits to workers, and families who were otherwise excluded from regular programs. this program was the difference between a fool dinner table and an empty one for a number of families. miss dixon. who benefited the most from these programs and can you tell us why? and thank you for the answer. >> the unemployment insurance program created 80 plus years ago, it has not been substantially modernized and it was created on a structurally racist foundation aimed at white male breadwinners and so if that is the foundation, that is who mostly benefits from unemployment insurance.
7:42 am
that means women workers, folks who work part-time, people who work in restaurants and service jobs where their wages are low are entirely left out of the program and most workers in gig jobs are excluded from the program so as the workforce is changed over time, many workers have been left on the sidelines. particularly this impact women and workers of color so adding this program invited them into the program, some for the first time in their working lives. >> thank you. in august 2020 the department of labor announced it would distribute $260 million in grants to address disparities in the administration of state unemployment insurance systems and promote equitable access to benefits. miss dixon, how has the department of labor's equity
7:43 am
grant impacted local communities across the country? >> 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 hard, understaffed, and under invested. one thing the equity grant program, and what the impacts are of the way the program is designed. it is not necessarily the individual actions they are taking but the system and how they need to change what they do to help offset the inequities in the system. that has been a critical piece for states to take to heart as they are working to serve unemployed workers. >> thank you. sadly, republicans are focused on programs that benefit regular everyday people, it is
7:44 am
impossible to take the criticisms of these programs. >> we need to ensure funds are used properly, and expand these programs permanently. democrats will continue to lead bold legislations that tackles the nation's crises while advancing equity and equal opportunities. thank you. >> the gentle lady yields back. the chair recognizes miss lee. >> thank you, chairman, and thank you for your testimony. on the last panel, i discussed and we discussed where we heard struggles of americans throughout the pandemic. they often had to choose whether to pay rent or childcare. these positions are unacceptable. i understand allstate approach unemployment differently. based on your research, is there an ideal state system we
7:45 am
could learn from congress? >> rather than an ideal state system the thing that congress could do is create a universal baseline that is federal standards that every state has to meet. right now, depending on the state you happen to be unemployed in you may receive a benefit as low as $235 a week as a maximum or you may receive eligibility as low as 12 weeks of payment as it goes to 26 weeks in other states so that doesn't make any sense that we would have this patchwork of programs if we really want to make sure we are serious about coming through for unemployed workers when they need us most so having a baseline of standards where there's a minimum there is a minimum of 26 weeks allstate have to face where the minimum number of dollar amounts with the state's economy, there's a minimum of eligibility standards that fits all workers, we need that and
7:46 am
we need that crucial lee, we also need an extended benefits program that turns on automatically when there is a crisis so workers are not waiting for congressional action but can rely on programs to bring them to action. >> we talked about how different workers benefited more from these programs. could you elaborate on the disparate impact the pandemic had on communities of color as you shared in your testimony. >> yes. our labor market is very stratified, and by stratified i mean women make up the largest portion of low-wage workers and people of color also and those jobs were actually really hit hard in this pandemic and so those folks lost their jobs, but because of history, they also don't have wealth accumulated and savings, so the fact these programs, took action so quickly and was able
7:47 am
to get money out the door, it meant a lot to folks who did not have savings to rely on and for whom this program made the difference between being able to pay rent and stay in their home. >> lastly, where would we have been without these programs. what would have happened to the millions of individuals who relied on these programs during the pandemic without them? >> we would have had incredible child poverty in the soon army of evictions, and many other bills that we were able to avoid, that was great for children, families, and communities, and congress really came through for working people in this program. it is something that we will feel the positive effects of for generations when families are in poverty it is very hard on children, hard on the mental health of parents if they don't have income. so there is a payoff beyond just the actual monetary amount
7:48 am
that happens in families that we will be reaping the benefits of for generations to come. >> thank you for your testimony and your answer. with that that i yield back. >> the gentle lady yields back, the chair recognizes. goldman from georgia. >> thank you for being here with us today. i'm from new york, new york state experienced its first covid 19 case on march 1st, 2020, and i actually got covid myself on march 10th, very early on. new york was at the epicenter of the pandemic at the beginning and more than 78,000 new yorkers have died as a result of covid. families in new york endured record unemployment throughout the pandemic, the employment insurance system became a lifeline for 5 million new yorkers. in my district, organizations like the china use american planning council connected 740
7:49 am
households with unemployment insurance, 2000 families with housing assistance, 1300 people excluded from federal relief programs got paid through new york city's innovative immigrant emergency relief program. that is just one outstanding organization of many. when covid surged, 22 million people lost their job, fell to our unemployment insurance system to take on the immense volume of new claims, new york's the permit of labor contributed one hundred $5 billion which is the equivalent to 50 years worth of benefits in the 2 years from the start of the pandemic but obviously this influx of benefits opened itself up to fraud especially through identity theft online which i know you have spoken about. new york state department of labor has recommended congress provide sustained investments in additional resources to help
7:50 am
states combat the ever evolving threat of cyber fraud. i'm curious, what you think congress should do to assist states separate from the federal baseline you talked about. where would our resources be most effective in assisting states to modernize and upgrade the unemployment insurance systems. >> echoing folks from the first panel, the information technology investments are critical. we have a decentralized system, 53 different unemployment insurance program so there are 53 opportunities for criminal fraud rings to attack the system, and so being able to invest in those systems, to harden those systems, to make sure those officers are staff, and one other critical thing congress can do is create a
7:51 am
program like the extended benefit program that actually can be preprogrammed and already has fraud measures built into it so that when there's a crisis it just triggers on and states are ready and not rushing to program a different program each time there is a crisis. >> thank you. one of the most productive and effective measures congress passed was the child tax credit. i would love for you to talk a little bit about the success of the child tax credit, why it was so successful at reducing child poverty. >> one piece of it was money went into bank accounts, they did not have to wait until they filed their taxes so when you add that money together with unemployment insurance payments, you have families
7:52 am
getting cash at a critical time so we see that in 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're paying your taxes as opposed to cashing, direct deposit or sent to you by check in that moment. is that what you are saying? >> the child tax credit is generally not paid on a monthly basis the way it was in this instance so it generally is something that either folks are changing their tax withholdings to account for or waiting until they get their taxes to get it so what was revolutionary was giving - putting the cash in families bank accounts. >> in my final second can you talk about how important child tax credit was to underserved
7:53 am
communities and people of color? >> we know that those families are the ones who were hit the hardest in the pandemic but also they are chronically hit the hardest because they are in the lowest paying jobs and so to make sure children actually have their needs met, this was critical and it was critical, it would have been critical at any time but it was 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. >> thank you and i yield back. >> the gentleman at times expired, the chair recognizes the gentle lady from new york, miss ocasio cortez. >> it can be difficult to remember given all that has happened in the last 3 years but i would like us to envision ourselves back in those first few months of the pandemic, spring of 2020. in march and april 2020 alone the economy lost more than 22
7:54 am
million jobs, and the unemployment rate skyrocketed to 14. 7%. jobs in sectors that are absolutely essential to the economy were threatened but after the cares act, states were able to put in place extended unemployment insurance programs when workers lost their jobs and census data shows these extended benefits kept approximately 5. 5 million people out of poverty in 2,020. miss dixon, i am curious about, from your vantage point, how expanded unemployment insurance played out at such a vital lifeline for workers as well as states during the pandemic. >> one reason is the an employment insurance program is inadequate, inadequate in how much the weekly benefit amount is so when congress added 600 a week and then 300, that was
7:55 am
amazing, especially in the states where the average benefit, the national average benefit is $300 a week. this made it possible for folks to stay in their homes, didn't have to choose between food and gas in their car, it was critical. i think part of what we have to do is learn from the success. we talk about instances where there was identity theft and fraud, but we haven't talked about the amazing amount of folks, what it meant for their ability to stay attached to the workforce. we have to mine the data on the good pieces and figure out what we can carry forward and what congress can do to carry those pieces forward as a minimum standard. >> absolutely, thank you for that information. for so much of that hearing, there is a constant focus not
7:56 am
just on the notion of the pandemic response being fraudulent or wasteful but it seems as though a particular fixation on the unemployment program which as you stated, if it weren't for the federal unemployment and governmental programs families would have been enduring months of unemployment and having to just scrounged by on $300 a week. especially when it comes to the skyrocketing costs of housing, this could have potentially, without that federal response, dramatically expanded the amount of housing insecurity, people who may be struggling with homelessness if it weren't for that. >> absolutely did. because even though there were also things congress created that warehousing supplements and assistance, it did take a while to get out, the ui program is the quickest way to
7:57 am
get money into the pockets of workers so this really did have a critical influence on being able to stay in homes and for folks to pay their rent and there was an eviction moratorium but it also means they were not sitting there with $10,000 that they could never pay. it kept them going in a way that made sure they were not incurring debt, to actually try to do their basic living expenses. >> despite experiencing the worst job loss since the great depression during that early covid period, the covid 19 recession was the shortest on a record. on record. to expand on the point you are making, how did the pandemic relief program, particularly unemployment insurance, help stabilize the economy from a macro perspective.
7:58 am
>> because so much of our economy is based on consumer spending, that is the first thing families cut back on. we know it is kind of like an un-virtuous cycle, there's an economic downturn, there's a contraction, and it gets worse and worse and so the program did what what it was designed to do which was stabilize the economy, stabilize communities and state economies and prevent that downward spiral and prevent a double dip recession which we had some experience with a pretty terrible recession not that long ago so being able to get through the pandemic without that protracted recession and without that protracted high unemployment rate. >> thank you. >> the gently lady yields back. the chair recognizes the distinguished ranking member, mister raskin. >> thank you, kindly, mr. chairman.
7:59 am
i've got a question triggered by something you said which is why did our unemployment insurance system grow in such a way it is decentralized in 50 states rather than being one national program? it seems that problems are legion with doing it that way? >> the reason is because the southern class in the 1930s would not have approved a program of that nature. there were proposals to make it a universal program, to make it pay for general fund dollars and those were not adopted because the southern states did not want people of color, black people in particular, to have access to this program. they wanted the control to be able to decide who qualifies and who does not. >> to my mind it is almost like having 50 different social security programs or 50 different medicare programs.
8:00 am
we've just been through period where we have seen the brokenness of a system that is that decentralized. thank you for clarifying that for me. the bottom line is expanded unemployment insurance even -- >> we believe this here to take you live to capitol hill to hear from president biden. he is speaking at the 70 first annual national prayer breakfast being held in washington dc. the other people we will see at the breakfast may be for later, congresswoman tracy man, republican from kansas will offer scripture readings and chaplain of the house, margaret gibbon will give the closing prayer, live coverage when it starts on c-span2. ♪♪ ..
8:01 am
♪ ♪ ♪ ♪ ♪ ♪ [inaudible conversations] [inaudible conversations]
8:02 am
[inaudible conversations]
8:03 am
>> [inaudible conversations] [inaudible conversations] [inaudible conversations]
8:04 am
[inaudible conversations] [inaudible conversations]
8:05 am
[inaudible conversations] >> once again, live coverage from capitol hill where shortly will hear from president biden who is speaking at the 71st annual national prayer breakfast which is being held here in washington, d.c. should start in just a a mome. live coverage here on c-span2. [inaudible conversations] [applause]


info Stream Only

Uploaded by TV Archive on