America's Talking - Episode 83: Unemployment Fraud May Top $60 Billion During Pandemic

Episode Date: January 27, 2023

Join The Center Square's Executive Editor Dan McCaleb and Reporter Brett Rowland as they discuss the federal government spending trillions of dollars a year on programs, but it doesn't have an inventory of all federal programs despite a 2011 law that says they must be tracked. Government report: Unemployment fraud may top $60 billion during pandemic. Classified documents were discovered at the Carmel, Ind., home of former Vice President Mike Pence last week, according to CNN. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello, everyone, and welcome to the America in Focus podcast, powered by the Center Square. America in Focus is a production of America's Talking Network. I'm Dan McAulib, executive editor of the Center Square Newswire Service. To support great podcasts like this one, please donate by clicking the link in the show description. Joining me today is not Casey Harper, but Brett Roland, investigative reporter at the Center Square. Brett, how are you? I'm great, Dan.

Thanks for having me on. Thanks for joining me on. Thanks for joining me. Our good colleague and friend, Casey, he and his wife. Welcome to Baby Boy this week. Exciting news, huh? Yes. I think this is their first.

So very exciting for them. Yeah, good for them. So he's taken some time off to spend with his wife and son. Wish them the best. Everybody's healthy, as I understand it. So good news there. Brett, we're recording this on Thursday, January 26th. before we get into the news this week, I got a question for you.

All right. Do you have any classified documents stored at your home or personal office? I don't think so. But boy, if I was a former president, I'd sure be check. Or vice president, I'd definitely be checking my home about now. You've got to think that Clinton has a couple or, I mean, he just didn't seem as very cautious to me. Yeah, what this is crazy in this. First, you had the raid on Trump's Mar-a-Lago home, and then lo and behold, President Biden,

himself from his days as vice president under President Obama, had classified documents at his garage and one of his personal offices. And now this week, former Vice President Mike Pence, we learned, had classified documents. What's going on? That's right. So they found 12 classified documents last week at Pence's home in Carmel, Indiana. So there's very little information about what was in these documents or how sensitive the information was. But this certainly looks like maybe there's a larger issue with controlling classified documents across levels of government.

The White House is not commenting on any of the documents so far. so we'll see how long they can keep that up. But it's certainly been something to watch. And it's hard to tell about how bad of a problem this is at this point. And it's a little bit, it's not comical. It's classified. Some instances, you know, top secret documents. So I don't want to say it's comical, but just have the finger pointing that goes on.

You know, everyone was all about, or I shouldn't say everyone, it's very partisan, the finger pointing. You know, Democrats were all about investigating and prosecuting Donald Trump. And then, you know, Biden's team found the documents in two separate locations, including his garage. Was it next to his Corvette? Is that what it was? Yeah, that's what the reports were. And so then, of course, the right was appointing fingers at Biden and calling for investigations. And now, you know, Pence had some documents.

It says, oh, maybe you should be investigated if you don't have classified documents store at your personal home or office. To be the big unanswered question here is what was actually in these documents? Were these like mistaken? They just took home. You know, if you're clearing out four or eight years with a paperwork from your office, you're bound to grab a few that we're supposed to stay at the office. But like how important were these documents, were they, you know, covert agents stationed in Russia or nuclear secrets? or were they memos that just hadn't been declassified or? Right.

Well, we'll see what the investigations turn up and what's shared with the public. The only thing I know for sure right now probably is that Barack Obama and George W. Bush are scouring their homes and their offices to make sure they don't have any. Clinton and Carter, too. President Carter's still. Yes. Yeah, they've all got to be looking. And the vice presidents too. I mean, you don't want any of that found in your house really at this point.

Who wants more involvement with the FBI or the justice? I sure don't. That's for sure. I did a quick scour, and I don't think I have any classified documents hanging around either. Why don't we move on to some other news? Brett, more news on the border. according to the U.S. Border Patrol, their own documents or their own data, 38 known terrorists were apprehended illegally trying to enter the country in the first three months of fiscal 23.

The federal fiscal year starts October 1st, so we've got three months of data on that. And that's a significant increase from years past, and that's a little concerning. it. Right. So there were 98 total arrested or apprehended in fiscal year 2022. And put that further in context, there were 15 in all of fiscal 2021. So already in the first three months of 2023, more have been apprehended than in 2021 the entire year. So there's certainly some interesting numbers. Now, exactly what's behind these, though, was less clear to me. So Dan, do you think that these increased numbers are just the product of lax enforcement? Yes, in terms of the Biden administration's policies when it comes to the border.

I think the Border Patrol agents themselves are doing all they can to do their jobs. But they've been handcuffed by this administration. There's been more than 3 million border crossing since President Biden took office. They're releasing more people into the United States. There's more what they call gotaways. Gottaways are how the federal government calls people. who illegally cross the border between points of entry and then evade law enforcement. There's plenty more of those.

And the scary thing is we don't know who those people are. So this 38 figure, yes, border patrol agents and good for them. They arrested or apprehended 38 known terrorists. That's 38 terrorists who aren't in the country where we don't know where they are. But how many more have gotten into the country as a gotaway, where they are, where they avoided capture. That's the scary thing. That certainly is. I mean, that's the kind of thing that would keep you up at night. So let's move on. Brett, you wrote a story this week about a federal program that a report found has spent more than a billion dollars on potential ineligible members.

Tell us about this. So this is the federal employees health benefits program, which is this huge government system that provides health benefits to about 8 million federal employees in their families. And so they found that almost a billion dollars per year is probably being spent on ineligible members. They found several cases that were very questionable. One of them was a federal employee who fraudulently covered two people that he said were his wife and stepchild. They were both ineligible, but they were both on this health insurance program for 12 years, and the government paid out more than $100,000 in claims on behalf of those two ineligible people. So it's a big system, but it also sounds like there's a lot of waste there.

So it's a $59 billion program. Not just waste. Right. Right. There's definitely fraud. They definitely found cases of fraud. But I mean, it's a huge system. So $59 billion in, in benefits. Yeah, $59 billion in benefits over, or that's the cost of the program for 2021. But so a billion dollars being spent the wrong way is never a good sign. A billion dollars a year, potentially. A billion dollars per year. So we don't know how many years this has been going on, but they did point to that one case where there's, you know, ineligible people on the benefit rolls for more than, for more than a decade. So it being the federal government, as efficient as they are, I'm sure they've got some quick fixes

in mind? No, I think this is going to take longer than that. There's the Office of General accountability has some made recommendations and ways to try to clean this up. But the Office of Personnel Management needs to basically come in and take steps to remove those who are who are ineligible and also take fraud more seriously. Take fraud more seriously. When the federal debt is more than $31 trillion, what's a billion dollars here and there? Federal debt is, I want to make sure I said that clearly. Federal debt is more than $31 trillion. dollars. What's a billion dollars when you're talking about that kind of money?

That's a good point. And that it's a great segue to our next story, which claims there could be as much as $60 billion in unemployment insurance fraud during the pandemic. Now, that number comes with two big caveats. One is that at least $45 billion of that money is flagged as potentially fraudulent, and only $4.3 billion of that has been proven. And that of the total amount given out in unemployment, there's about $878 billion given out in unemployment benefits through the pandemic. These were those enhanced, enhanced federal benefits that would be, because of COVID-19, you know, businesses were forced to shut down. Businesses that were deemed non-critical were forced to shut down. There were massive layoffs.

I remember the early months of the pandemic, you know, every Thursday when the federal government released the unemployment data, we were scrambling. in all of our states to figure out how bad it was, the unemployment numbers in our states. So this was that money was paid out during the first year or so of the pandemic. Yeah, about the first year and a half was when most of this occurred. And they're looking at $60 billion. Now, this has just been flagged. So it's not that money hasn't been totally written off. And some of it, I guess, could still be reclaimed through clawback efforts.

But it's an eye-popping number that really makes you wonder whether there, there were enough safeguards put in place for giving out this money. I realize the intention was to get it out quickly, but, you know, there's costs that come with speed, I guess. Yeah, well, that's, I remember when, you know, we were covering it at the Center Square when all this was going on. And, yeah, I mean, something like this where usually the states collect unemployment benefits or tax businesses and workers. to build up their unemployment benefits programs. The federal government stepped in on this one and added to those state programs

and really it was done in a matter of weeks, maybe even days, so they obviously weren't prepared for the amount of fraud that did occur. And the fraud was just massive. I know that even internally we saw it, I think that someone filed benefit claims on my behalf while I was still employed.

I think that a number of other employees, employees got targeted to. Me too. Me too. Yeah. So Chris was the center square. He also had a claim filed on his behalf. Yeah. I mean, it was just fast and furious. People were filing, just jumping at the chance to get that federal money. And it looks like a lot of it went places where it shouldn't have. Right. There was a story out of California going on a year and a half or so ago now where they found that prison inmates were applying and receiving unemployment benefits.

Yes, I mean, there seems to be no limits. I mean, there was a case out of Chicago just the other day where a woman, this was under the PPP program, a woman had used it to buy like Gucci dog collars and a yacht. So, I mean, there's just a lot of this money didn't go that was given out by the federal government during the pandemic, didn't go where it should have. Well, it's no wonder the United States is more than. and 31 trillion in debt when you've got all this fraud going on. And I don't know, it's mind-boggling, I guess.

It certainly is. I mean, it's just so much money. It's hard to even put it in perspective sometimes. You wrote this week, Brett, about a plan floated by some Republicans to essentially reform the federal tax system. Yeah. This is, to me was. Reform's not, probably not the best, the greatest word there, but you significantly change the federal tax system.

Yeah, this would like explode the existing system and create a whole new one. So this is a huge change and the government generally doesn't like large change to come all at once. So this is really unlikely to advance. But it is an interesting thing and it will probably get more discussion, especially as the 2017 tax cuts and job acts about 23 provisions of that are set to expire at the end of 2025. So there's going to be taxes. There's going to be more discussion about how the U.S. government taxes, who pays those taxes and how much they pay and what the rate should be.

But this is specifically focused on the Fair Tax Act, which comes from Earl Carter out of Georgia. Some form of this national consumption tax has been around for about a decade. but this would essentially put a about 30% sales tax on everything you buy. But it would do away with a lot of things that we don't like, you know, paying income taxes to the federal government. To get rid of IRS if you do that, right? Yeah, so right. And that's actually part of the bill. So it calls for essentially ceasing IRS funding by,

2027. So the IRS would be gone. The IRS, mind you, is a agency that has about 78,000 employees now. They're looking to hire another 87,000. It has a $13.7 billion operations budget, and it reviews 260 million federal tax returns each year and brings in $4.1 trillion in taxes. So getting rid of the this agency would be no small task. And they'd have to build up infrastructure at the state level to collect a national sales tax. So there's some really huge challenges for this. But I think that a lot of people would like the simplicity of it. It would essentially do away with the tax preparation industry, for at least for individuals with simple filing. I think businesses would still probably need tax preparers and accounts. But I mean, it's just such a huge change that I think that it's unlikely to

pass in its current form. Maybe some of these changes can be made incrementally, but there's no way something this big is going to pass. What did you see in here, Dan, anything you saw in here that you liked? Well, I was going to get rid of the IRS. It's getting close to tax season here. We're going to be preparing our own personal taxes and not having to file income taxes. Yes, that was what I was going to ask you. What are the arguments, what are the opponents of this consumption tax, national consumption tax, say, why? Why not? Well, there's some issues. So if you're taxing just based on consumption, you could make the argument that people that have more money and don't need to spend all of their income for housing

and health insurance and have more money to save would be paying less taxes, perhaps. But I guess just how you structure it, I think is a good topic for discussion that isn't really discussed all that often in Washington. So it's interesting to see different ideas. he is. But I just don't think that this is going to go anywhere. And I had a great conversation with Garrett Watson over at the Tax Foundation in Washington, D.C. And he said that he would be surprised if this really went anywhere, even if it got a positive committee vote. That would be big news for this plan, which has been around since 1999. Did he have an opinion on it one way or the other? No, the tax partisan is, I'm sorry, the Tax Foundation is nonpartisan. And, and

they don't tend to like, advocate for a certain thing. He's very, he's definitely a walk. He gets all the ins and out of whether a tax is progressive or regressive. He can talk about the benefits. And he, he, he's very informed. So he doesn't have an opinion on it, but he thinks that it would, it's unlikely to go far because of just the, how, the scope of the bill. Right. Well, and as partisan, and gridlock is Congresses, Anyway, you can't get little things past nowadays, let alone something as genormous as this would be. So there's, yeah, there's no way this thing goes anywhere. I agree with you, though.

Let's have a conversation about it. Why not? What are the pros and the cons? So that's why I think it's so interesting. And that's why I wanted to write more about it is, you know, there are plans out there. This is not a plan that's not going to catch on with the mainstream. But it is interesting to see different ideas and how different people might fare and how businesses, too, might benefit from this. So, like, under this plan, there would be, so people that were fell below the poverty line would get essentially a monthly rebate on their sales tax.

And businesses would, like, so if you bought chairs for your restaurant, you wouldn't pay tax on those chairs, but you would have to collect tax on the goods you sell for final, like, once we finally distribute it, then you'd have to sell it. So some people say this would be very good for business growth, it would be very pro-growth measure. But it's such a big change that it's hard to even get your hands around it. Or it's hard for me to get my head around, like what it would actually mean or what it would do for businesses, for people, things like that. Sounds like it would be ripe for fraud too,

but hey, there's fraud in every other government tax and spend measure, so why not? That's true. That's true. And another interesting part about this would be that businesses and then states would collect money and then remit it to the U.S. Treasury. So, I mean, there would be, it just would be so many different changes that I think it would be hard to do in any sort of shorter amount of time. Because government just can't move quickly. Brett, we've got time. Just talk briefly about one more story.

And I'm going to start this off with a question as well. Do you know how many federal government programs there are in existence today? No. and I'll tell you what, the government also doesn't know, but they want to find out. So back in 2011, there was an overhaul passed to try to get the government to be a little bit more efficient and have a better inventory of what programs the government was offering, what federal programs. So this week, the Government Accountability Office came out with a new report that basically said, that law, which passed in 2011, hasn't been fully implemented and this still could take a few more years to get it going.

The goal was to have all federal programs, along with financial information about that program, listed so that you can sort of compare and see if there was going to be duplication or overlap or things that just didn't need to be done. So that hasn't happened yet. And part of it, a big reason, is a lack of a common definition as to what a government program is. Really? So, yes. So for small or limited government advocates, this probably drives them just crazy. But yes, the government doesn't know many of programs it has. That's not a surprising thing.

It's bad, but it's not surprising. Yes. So the GAO has made a bunch of recommendations to the office of management and budget to try to get this going and have this done by 2025. They understand, they say, given the size and scope of the federal government, developing a complete inventory of federal programs is a complex undertaking. And surely it is. But at the same time, I think taxpayers deserve to know how their money is being spent and whether

there's duplicate or ineffective or outdated programs out there that need to be cut. Brett, if my faith in the federal government wasn't already completely torn to shreds before this podcast, I think it's probably there now. But that is all the time. we have this this week. This has been the American Focus podcast. Congratulations if you're listening out there, Casey. Brett, better go back and double check your home there, see if you got any classified documents, maybe a suggestion for all of our listeners. Or Brett Rowland, I'm Dan McKalib. We'll talk to you next week.