President Joe Biden’s administration is asking Congress to agree to pay more than $1.6 billion to help clean up a mess of massive government fraud relief programs for the coronavirus pandemic.
In a strategy released Thursday, the administration called for money and more time to prosecute cases, to introduce new ways to prevent identity theft and to help people whose identities have been stolen.
In a conversation with reporters, The White House American bailout plan coordinator Gene Sperling was hopeful that Congress, including the GOP-controlled House that is often hostile to the Democratic administration, would see the spending as an investment.
“It’s just so clear and the evidence is so strong that a dollar wisely spent here will return to taxpayers or save at least $10,” Sperling said, pointing to recoveries that have already occurred. That The US Secret Service recovered $286 million last year sent out in fraudulently obtained loans through the Small Business Administration.
Sperling said the request would be part of the budget proposal Biden is scheduled to present on March 9 — but the bulk of it would be separate from the one-year appropriations request. Details had to be worked out with Congress.
Shortly after the shards the American economy was shut down after the coronavirus hit the country in 2020, Congress began authorizing massive relief measures to help governments, businesses and individuals affected. Relief measures — some signed by Biden and some by his predecessor, Donald Trump — totaled nearly $6 trillion. This is more than the government spent annually before the pandemic.
The money went to boost unemployment insurance programs, help those in the gig economy who lost jobs, cover government costs and keep businesses afloat.
“Overall, those programs did tremendously well,” Sperling said. “There were also cases where guardrails were lowered unnecessarily, leading to unnecessary and massive fraud.”
ONE congressional committee found that financial technology companies did not properly screen applicants for the giant Paycheck Protection Program. Fraudulent claims for unemployment benefits overwhelmed government computer systems, which sometimes had trouble identifying the fakes while slowing down many legitimate applications. The Department of Labor estimated that there were $164 billion in improper unemployment fraud payouts alone — much of it to fraudsters
Many of the scams claimed false or stolen personal information.
Biden’s plans aim to address prosecution and prevention. He is asking for $600 million for prosecutions, including funds to create at least 10 new Justice Department strike forces in addition to the three that already exist to go after crime syndicates and other fraudsters. He also calls for increasing the statute of limitations for such crimes to 10 years from the current five, allowing more time to investigate and prosecute cases.
And he’s calling for policy changes to ensure the Labor Department Inspector General’s Office has ongoing access to data showing where the same identity was used to apply for benefits in multiple states. That office and other inspector general offices would share at least $300 million to hire investigators.
Biden also plans to eventually issue an executive order instructing federal agencies on how to crack down on identity fraud, including modernizing government systems to prevent identity theft.
Part of the money would go toward improving a Federal Trade Commission website, IdentityTheft.gov, a place for people to report identity theft and get help.
The proposal also notes that $1.6 billion from the US bailout — the last of the major relief measures passed in 2021 — will be made available in June to help states improve their measures against identity theft.
