Pandemic Relief: Where's the Money? NewsWire

NewsWire: 8/2/22

• The pandemic’s arrival triggered an unprecedented flood of government aid—and an equally historic degree of fraud. Estimates put the amount lost to fraud at anywhere from $100B to $400B. (Bloomberg)
• NH: Across six Covid-19 relief packages, the federal government distributed more than $5T to businesses and families. But according to new estimates, a lot of that relief was stolen.
• A recent analysis by the Labor Department has found that billions of dollars of enhanced unemployment benefits were improperly distributed. What happened? The sheer number of claims and additional supplements overwhelmed unemployment offices. This opened the system to fraudsters, who filed thousands of false unemployment applications.
• An estimated $163B was misspent. That's 19% of the total spending on Covid-related unemployment benefits. And only $4B has been recovered. How much is $163B? It's a lot. It's more than all branches of the U.S. military spend yearly on weapons procurement. Or more than the VA spends yearly on all cash benefits to veterans and their survivors.

• A study by the University of Texas has found misspending as well in the Paycheck Protection Program. Of the 11.5M loans, 12% involved some evidence of fraud. The researchers concluded that about $117B in PPP benefits was improperly spent. 
• How has the government responded? Federal law enforcement has brought charges against a parade of bad actors. And in June, the House GOP introduced the Chase Covid Unemployment Fraud Act to incentivize states to root out fraudsters. The bill allows state governments to keep 25% of the funds they recover. 
• All in all, this stolen money leaves a sour taste in the mouth of many voters. To be sure, an economist might argue that it doesn't really matter how the government passes out money. It all stimulates the economy just the same.
• But most voting citizens are not economists--thank god! And they expect public money to be spent according to rules which are agreed upon and enforced. Many will interpret rampant pandemic fraud as just another example of institutions failing.
• Some pundits predict the GOP will hammer the issue in the midterms. Yes, this fraud happened under both Republican and Democratic administrations. But Biden is the current president, and his party has been most supportive of ample benefit spending. Biden will need to explain how the fraud took place under his watch.