Congressional Record, Volume 169 Issue 80 (Thursday, May 11, 2023)

[Congressional Record Volume 169, Number 80 (Thursday, May 11, 2023)]
[House]
[Pages H2281-H2293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PROTECTING TAXPAYERS AND VICTIMS OF UNEMPLOYMENT FRAUD ACT

Mr. SMITH of Missouri. Mr. Speaker, pursuant to House Resolution 383,
I call up the bill (H.R. 1163) to provide incentives for States to
recover fraudulently paid Federal and State unemployment compensation,
and for other purposes, and ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 383, the
amendment in the nature of a substitute recommended by the Committee on
Ways and Means, printed in the bill, modified by the amendment printed
in House report 118-51, is adopted and the bill, as amended, is
considered read.
The text of the bill, as amended, is as follows:

H.R. 1163

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Protecting Taxpayers and
Victims of Unemployment Fraud Act''.

SEC. 2. RECOVERING FEDERAL FRAUDULENT COVID UNEMPLOYMENT
COMPENSATION PAYMENTS.

(a) Allowing States to Retain Percentage of Overpayments
for Program Integrity.--
(1) Pandemic unemployment assistance.--Section 2102(d) of
the CARES Act (15 U.S.C. 9021(d)) is amended by amending
paragraph (4) to read as follows:
``(4) Fraud and overpayments.--Section 2107(e) shall apply
with respect to pandemic unemployment assistance under this
section by substituting `pandemic unemployment assistance'
for `pandemic emergency unemployment compensation' each place
it appears in such section 2107(e).''.
(2) Federal pandemic unemployment compensation.--Section
2104(f)(3) of such Act (15 U.S.C. 9023(f)(3)) is amended--
(A) in subparagraph (A)--
(i) by striking ``3-year'' and inserting ``10-year''; and
(ii) by inserting ``, except that a State may retain a
percentage of any amounts recovered as described in
subparagraph (C)'' before the period at the end; and
(B) by adding at the end the following:
``(C) Retention of percentage of recovered funds.--The
State agency may retain 25 percent of any amount recovered
from overpayments of Federal Pandemic Unemployment
Compensation or Mixed Earner Unemployment Compensation that
were determined to be made due to fraud. Amounts so retained
by the State agency shall be used for any of following:
``(i) Modernizing unemployment compensation systems and
information technology to improve identity verification and
validation of applicants.
``(ii) Reimbursement of administrative costs incurred by
the State to identify and pursue recovery of fraudulent
overpayments.
``(iii) Hiring fraud investigators and prosecutors.
``(iv) Other program integrity activities as determined by
the State.'';
(3) Pandemic emergency unemployment compensation.--Section
2107(e)(3) of such Act (15 U.S.C. 9025(e)(3)) is amended--
(A) in subparagraph (A)--
(i) by striking ``3-year'' and inserting ``10-year''; and
(ii) by inserting ``, except that a State may retain a
percentage of any amounts recovered as described in
subparagraph (C)'' before the period at the end; and
(B) by adding at the end the following:
``(C) Retention of percentage of recovered funds.--The
State agency may retain 25 percent of any amount recovered
from overpayments of pandemic emergency unemployment
compensation that were determined to be made due to fraud.
Amounts so retained by the State agency shall be used for any
of following:
``(i) Modernizing unemployment compensation systems and
information technology to improve identity verification and
validation of applicants.
``(ii) Reimbursement of administrative costs incurred by
the State to identify and pursue recovery of fraudulent
overpayments.
``(iii) Hiring fraud investigators and prosecutors.
``(iv) Other program integrity activities as determined by
the State.''.
(4) Extended unemployment compensation.--A State to which
section 4105 of the Families First Coronavirus Response Act
(26 U.S.C. 3304 note) applied may retain 25 percent of any
amount recovered from overpayments of sharable extended
compensation and sharable regular compensation (as such terms
are defined in section 204 of the Federal-State Extended
Unemployment Compensation Act of 1970) paid for weeks of
unemployment described in such section 4105 that were
determined to be made due to fraud. Amounts so retained by
the State agency shall be used for any of the purposes
described in section 2107(e)(3)(C) of the CARES Act (15
U.S.C. 9025(e)(3)(C)).
(5) First week of regular compensation.--A State that was a
party to an agreement under section 4105 of the CARES Act (15
U.S.C. 9024)

[[Page H2282]]

may retain 25 percent of any amount recovered from
overpayments of regular compensation paid to individuals by
the State for their first week of regular unemployment for
which the State received full Federal funding under such
agreement in any case in which such overpayments were
determined to be made due to fraud. Amounts so retained by
the State agency shall be used for any of the purposes
described in section 2107(e)(3)(C) of the CARES Act (15
U.S.C. 9025(e)(3)(C)).
(b) Treatment Under Withdrawal Standard and Immediate
Deposit Requirements.--Any amount retained by a State
pursuant to paragraph (4) or (5) of subsection (a) or under
section 2102(d)(4), section 2104(f)(3)(C), or 2107(e)(3)(C)
of the CARES Act, and used for the purposes described
therein, shall not be considered to violate the withdrawal
standard and immediate deposit requirements of paragraph (4)
or (5) of section 303(a) of the Social Security Act (42
U.S.C. 503(a)) or paragraph (3) or (4) of section 3304(a) of
the Internal Revenue Code of 1986.
(c) Limitation on Retention Authority.--The authority of a
State to retain any amount pursuant to paragraph (4) or (5)
of subsection (a) and under section 2102(d)(4), section
2104(f)(3)(C), and 2107(e)(3)(C) of the CARES Act shall apply
only--
(1) with respect to an amount recovered on or after the
date of enactment of this Act; and
(2) during the 10-year period beginning on the date on
which such amount was received by an individual not entitled
to such amount.

SEC. 3. PERMISSIBLE USES OF UNEMPLOYMENT FUND FOR PROGRAM
ADMINISTRATION.

(a) Withdrawal Standard in the Internal Revenue Code.--
Section 3304(a)(4) of the Internal Revenue Code of 1986 is
amended--
(1) in subparagraph (F), by striking ``and'' after the
semicolon; and
(2) by inserting after subparagraph (G) the following new
subparagraphs:
``(H) provided the certifications made by the State as
described in section 4 of the Protecting Taxpayers and
Victims of Unemployment Fraud Act are in effect at the time
of approval of the State law under this subsection, an
amount, not to exceed 5 percent, of any overpayment of
compensation recovered by the State (other than an
overpayment made as the result of agency error) may,
immediately following the State's receipt of such recovered
amount, be deposited in a State fund from which money may be
withdrawn for--
``(i) the payment of costs of deterring, detecting, and
preventing improper payments;
``(ii) purposes relating to the proper classification of
employees and the provisions of State law implementing
section 303(k) of the Social Security Act;
``(iii) the payment to the Secretary of the Treasury to the
credit of the account of the State in the Unemployment Trust
Fund;
``(iv) modernizing the State's unemployment insurance
technology infrastructure; or
``(v) otherwise assisting the State in improving the timely
and accurate administration of the State's unemployment
compensation law; and
``(I) provided the certifications made by the State as
described in section 4 of the Protecting Taxpayers and
Victims of Unemployment Fraud Act are in effect at the time
of approval of the State law under this subsection, an
amount, not to exceed 5 percent, of any payments of
contributions, or payments in lieu of contributions, that are
collected as a result of an investigation and assessment by
the State agency may, immediately following receipt of such
payments, be deposited in a State fund from which moneys may
be withdrawn for the purposes specified in subparagraph
(H);''.
(b) Definition of Unemployment Fund.--Section 3306(f) of
the Internal Revenue Code of 1986 is amended by striking
``and for refunds of sums'' and all that follows and
inserting ``, except as otherwise provided in section
3304(a)(4), section 303(a)(5) of the Social Security Act, or
any other provision of Federal unemployment compensation
law.''.
(c) Withdrawal Standard in Social Security Act.--Section
303(a)(5) of the Social Security Act (42 U.S.C. 503(a)(5)) is
amended by striking ``and for refunds of sums'' and all that
follows and inserting ``except as otherwise provided in this
section, section 3304(a)(4) of the Internal Revenue Code of
1986, or any other provisions of Federal unemployment
compensation law; and''.
(d) Immediate Deposit Requirements in the Internal Revenue
Code.--Section 3304(a)(3) of the Internal Revenue Code of
1986 is amended to read as follows:
``(3) all money received in the unemployment fund shall
immediately upon such receipt be paid over to the Secretary
of the Treasury to the credit of the Unemployment Trust Fund
established by section 904 of the Social Security Act (42
U.S.C. 1104), except for--
``(A) refunds of sums improperly paid into such fund;
``(B) refunds paid in accordance with the provisions of
section 3305(b); and
``(C) amounts deposited in a State fund in accordance with
subparagraph (H) or (I) of paragraph (4);''.
(e) Immediate Deposit Requirement in Social Security Act
Requirement.--Section 303(a)(4) of the Social Security Act
(42 U.S.C. 503(a)(4)) is amended by striking the
parenthetical and inserting ``(except as otherwise provided
in this section, section 3304(a)(3) of the Internal Revenue
Code of 1986, or any other provisions of Federal unemployment
compensation law)''.
(f) Application to Federal Payments.--When administering
any Federal program providing compensation (as defined in
section 3306 of the Internal Revenue Code of 1986), the State
shall use the authority provided under subparagraphs (H) and
(I) of section 3304(a)(4) of such Code in the same manner as
such authority is used with respect to improper payments made
under the State unemployment compensation law. With respect
to improper Federal payments recovered consistent with the
authority under subparagraphs (H) and (I) of such section,
the State shall immediately deposit the same percentage of
the recovered payments into the same State fund as provided
in the State law implementing that section.
(g) Effective Date.--The amendments made by this section
shall apply to overpayments or payments or contributions (or
payments in lieu of contributions) that are collected as a
result of an investigation and assessment by the State agency
after the end of the 2-year period beginning on the date of
the enactment of this Act, except that nothing in this
section shall be interpreted to prevent a State from amending
its law before the end of the 2-year period beginning on the
date of the enactment of this Act.

SEC. 4. PREVENTING UNEMPLOYMENT COMPENSATION FRAUD THROUGH
DATA MATCHING.

(a) In General.--As a condition for the eligibility of a
State to implement the exceptions to the withdrawal standard
described in subparagraphs (H) and (I) of section 3304(a)(4)
of the Internal Revenue Code, the State shall certify each of
the following:
(1) Integrity data hub.--The State uses the system
designated by the Secretary of Labor (or another system at
the discretion of the State) for cross-matching claimants of
unemployment compensation to prevent and detect fraud and
improper payments.
(2) Use of fraud prevention and detection systems.--The
State has established procedures to do the following:
(A) National directory of new hires.--Use the National
Directory of New Hires established under section 453(i) of
the Social Security Act--
(i) to compare information in such Directory against
information about individuals claiming unemployment
compensation to identify any such individuals who may have
become employed;
(ii) to take timely action to verify whether the
individuals identified pursuant to clause (i) are employed;
and
(iii) upon verification pursuant to clause (ii), to take
appropriate action to suspend or modify unemployment
compensation payments, and to initiate recovery of any
improper payments that have been made.
(B) State information data exchange system.--Use the State
Information Data Exchange System (or another system at the
discretion of the State) to facilitate employer responses to
requests for information from State workforce agencies.
(C) Incarcerated individuals.--Seek information from the
Commissioner of Social Security under sections
202(x)(3)(B)(iv) and 1611(e)(1)(I)(iii) of the Social
Security Act, or from such other sources as the State agency
determines appropriate, to obtain the information necessary
to carry out the provisions of a State law under which an
individual who is confined in a jail, prison, or other penal
institution or correctional facility is ineligible for
unemployment compensation on account of such individuals
inability to satisfy the requirement under section 303(a)(12)
of such Act.
(D) Deceased individuals.--Compare information of
individuals claiming unemployment compensation against the
information regarding deceased individuals furnished to or
maintained by the Commissioner of Social Security under
section 205(r) of the Social Security Act.
(b) Unemployment Compensation.--For the purposes of this
section, any reference to unemployment compensation shall be
considered to refer to compensation as defined in section
3306 of the Internal Revenue Code of 1986.

SEC. 5. EXTENSION OF EMERGENCY STATE STAFFING FLEXIBILITY.

If a State modifies its unemployment compensation law and
policies with respect to personnel standards on a merit basis
on an emergency temporary basis as determined by the
Secretary, including for detection, pursuit, and recovery of
fraudulent overpayments under Federal pandemic unemployment
compensation programs authorized under the CARES Act (15
U.S.C. 9021 et seq.), subject to the succeeding sentence,
such modifications shall be disregarded for the purposes of
applying section 303 of the Social Security Act (42 U.S.C.
503) and section 3304 of the Internal Revenue Code of 1986 to
such State law. Such modifications may continue through
December 31, 2030.

SEC. 6. FRAUD ENFORCEMENT HARMONIZATION.

Notwithstanding any other provision of law, any criminal
charge or civil enforcement action alleging that an
individual engaged in fraud with respect to compensation (as
defined in section 3306 of the Internal Revenue Code of 1986)
shall be filed not later than 10 years after the offense was
committed.

SEC. 7. BUDGET OFFSET.

Section 2118 of the CARES Act (15 U.S.C. 9034) is
repealed.

SEC. 8. STATE FUND CONTINGENCY.

Subject to appropriations, the unobligated balance as of
the day before the date of the enactment of this Act of
amounts made available under section 2118 of the CARES Act
(15 U.S.C. 9034) shall be transferred to the Secretary of the
Treasury and periodically credited, on an as-needed basis, to
the appropriate State account in the Unemployment Trust Fund
established by section 904 of the Social Security Act (42
U.S.C. 1104) in an amount that replaces the amount deposited
by a State in a State fund in accordance with subparagraph
(H) or (I) of section 3304(a)(4) of the Internal Revenue Code
of 1986 (as amended by section 3(a) of this Act) if the
amount in such State account is less than the amount that
would be in such State account if such subparagraphs had not
been enacted.

[[Page H2283]]

The SPEAKER pro tempore. The bill, as amended, shall be debatable for
1 hour equally divided and controlled by the chair and ranking minority
member of the Committee on Ways and Means or their respective
designees.
The gentleman from Missouri (Mr. Smith) and the gentleman from
Illinois (Mr. Davis) each will control 30 minutes.
The Chair recognizes the gentleman from Missouri (Mr. Smith).

General Leave

Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on the bill under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, this crucial legislation will finally protect taxpayers
and victims of fraud against the largest theft of tax dollars in
American history.
Americans are suffering under a cost-of-living crisis fueled by
Democrats' reckless spending. It has brought us to the brink of
recession and spurred the highest increase in interest rates in 16
years.
It must be infuriating for folks to also see that it is not just the
American Dream that is being stolen from them but their identities and
their tax dollars.
Criminal organizations and foreign fraudsters exploited the pandemic
to steal hundreds of billions in payments intended to keep workers
afloat amidst government lockdowns, and the victims need our help.
How much has been stolen? The Department of Labor inspector general
told the Ways and Means Committee that taxpayers may be on the hook for
at least $191 billion in improper payments, and that is just the lower
estimate. Outside experts estimate up to $400 billion of improper
payments.
While working Americans were trying to piece their lives back
together during the pandemic, Democrats did nothing to fight fraud.
When Democrats held the majority on Ways and Means, they ignored,
blocked, and shot down commonsense safeguards and refused to hold even
one hearing on this fraud.
That inaction made it clear that their soft-on-crime agenda does not
just apply to carjackings and looting department stores. It applies to
defrauding the Federal Government, as well.
During his State of the Union, President Biden said the watchdogs are
back. He rolled out the position of chief pandemic prosecutor at the
Department of Justice. Since then, even as we have discovered more
instances of fraud, the Biden administration official responsible for
prosecuting it has resigned, and the position sits vacant for months.
That is not accountability. We couldn't afford inaction for the last
2 years, and we can afford it even less today.
These are stolen tax dollars, which makes every person in America a
victim of this fraud. Today's vote is an important step toward ending
suffering and delivering accountability.
The Protecting Taxpayers and Victims of Unemployment Fraud Act gives
States the tools they need to go after fraudsters and shores up
vulnerabilities by improving identity verification and modernizing
State UI systems.
It allows States to retain 25 percent of fraudulent Federal funds
recovered. This is a real incentive for States to pursue what can be
costly investigations and prosecutions because now they can use
recovered funds to improve UI program integrity and fraud prevention.
These dollars can go toward hiring investigators and prosecutors to go
after criminals to recover fraud payments. This will also give States
the resources to modernize systems and technology to better verify
identity and income for unemployment and deter, detect, and prevent
improper payments.
This legislation also allows States to keep 5 percent of UI
overpayments recouped in the future to continue to improve benefit
delivery and eligibility verification. This includes matching State
lists against databases, which will help reduce payments to deceased
and incarcerated individuals.
Many of these reform ideas are bipartisan and very long overdue. Some
are supported by the Department of Labor inspector general and were
even included in past budget requests from President Trump and
President Obama. Even Biden has included several of the ideas in the
Protecting Taxpayers and Victims of Unemployment Fraud Act in his most
recent budget request.
I am hopeful House Democrats will join here to also protect taxpayers
and support this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Democrats strongly agree that those who took advantage of the COVID
crisis to commit fraud must be held accountable. Indeed, Democrats put
$2 billion in the American Rescue Plan Act to fight fraud, and every
House Republican voted against these investments to prevent fraud and
hold criminals accountable.
These Democratic anti-fraud dollars helped the Department of Labor
create an important cross-checking system to catch fraudsters who apply
for unemployment in one State while receiving income in another, a
practice for which a Republican House Member reportedly was indicted
earlier this week.
Republicans are playing a dangerous game by cutting ongoing
successful work by the Federal Government to fight fraud and leaving
States to pick up the pieces.
The Department of Labor expressed deep concern about how H.R. 1163
will ``throttle essential, ongoing efforts to strengthen and protect
the UI program.''
Instead of punishing organized crime, the Republican H.R. 1163 guts
Federal funding to fight fraud, weakens State unemployment systems,
privatizes American public service jobs, and sends cruel surprise bills
to innocent workers who were unemployed during the pandemic.
We enacted bipartisan pandemic unemployment benefits that kept an
estimated 5 million people a year from falling into poverty.

{time} 1445

This assistance meant revenue and customers for businesses and helps
spur our economic recovery. Unfortunately, when disaster struck, State
unemployment systems were not prepared. Mistakes were made and
thousands of workers were overpaid.
Again, we worked in bipartisan fashion to encourage States to waive
overpayments to protect unemployed workers. Now, Republicans want to
force States to claw back accidental overpayments from workers up to 10
years later.
When my GOP colleagues incorrectly assert that the bill limits the
claw back of overpayments to fraud, they are only referring to a very
narrow limit on the ability of States to keep portions of recovered
fraud payments.
My Democratic colleagues and I offered many amendments to invest in
antifraud efforts, protect workers, and strengthen State unemployment
systems. The Republicans rejected every amendment.
Instead, the GOP careens ahead with H.R. 1163 that the CBO estimates
is a net cut in Federal investment in fighting unemployment fraud and
strengthening unemployment systems.
That is why so many organizations oppose H.R. 1163, including the
AFL-CIO; the American Federation of State, County and Municipal
Employees; the Center on Budget and Policy Priorities; the
Communications Workers of America; the National Employment Law Project;
and the Service Employees International Union.
Mr. Speaker, I urge my colleagues to oppose this dangerous bill, and
I reserve the balance of my time.
Mr. SMITH of Missouri. Mr. Speaker, I yield 3 minutes to the
gentleman from Illinois (Mr. LaHood), chairman of the Work and Welfare
Subcommittee.
Mr. LaHOOD. Mr. Speaker, I thank Chairman Smith for yielding.
Mr. Speaker, today, Republicans are following through on our promise
to the American people last fall in our commitment to a government that
is accountable.

[[Page H2284]]

I rise in strong support of H.R. 1163. This long-awaited bill is
needed to address the unprecedented levels of fraud in pandemic
unemployment programs.
Every dollar going to fraud is a dollar that did not go to those who
actually needed it. My home State of Illinois paid out nearly $2
billion in Federal funds for fraudulent unemployment claims, nearly
half of the money paid out by the State.
Mr. Speaker, I include in the Record an audit by the State of
Illinois Department of Economic Security from June 2020.

STATE OF ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY

Individual Nonshared Proprietary Fund, Financial Statements--For the
Year Ended June 30, 2021

Performed as Special Assistant Auditors For the Auditor General, State
of Illinois

Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing
Standards

Hon. Frank J. Mautino
Auditor General, State of Illinois

As Special Assistant Auditors for the Auditor General, we
were engaged to audit, in accordance with the auditing
standards generally accepted in the United States of America
and the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller
General of the United States, the financial statements of the
Unemployment Compensation Trust Fund (Trust Fund), an
individual nonshared proprietary fund of the State of
Illinois, Department of Employment Security (Department), as
of and for the year ended June 30, 2021, and the related
notes to the financial statements, which collectively
comprise the Trust Fund's basic financial statements, and
have issued our report thereon dated June 3, 2022. Our report
disclaims an opinion on such financial statements due to
material weaknesses in internal control over one of the
benefit payment systems, for which we were unable to obtain
sufficient appropriate audit evidence over related amounts.

Internal Control Over Financial Reporting

In connection with our engagement to audit of the financial
statements, we considered the Department's internal control
over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on
the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the
Department's internal control. Accordingly, we do not express
an opinion on the effectiveness of the Department's internal
control.
A deficiency in internal control exists when the design or
operation of a control does not allow management or
employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, misstatements
on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be
prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by
those charged with governance.
Our consideration of internal control was for the limited
purpose described in the first paragraph of this section and
was not designed to identify all deficiencies in internal
control that might be material weaknesses or significant
deficiencies and, therefore, material weaknesses or
significant deficiencies may exist that have not been
identified. We did identify certain deficiencies in internal
control, described in the accompanying Schedule of Findings
as items 2021-001 through 2021-003 that we consider to be
material weaknesses.

Compliance and Other Matters

In connection with our engagement to audit the financial
statements of the Trust Fund, we performed tests of its
compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the financial
statements. However, providing an opinion on compliance with
those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results
of our tests disclosed instances of noncompliance or other
matters that are required to be reported under Government
Auditing Standards and which are described in the
accompanying Schedule of Findings as items 2021-001 through
2021-003. Additionally, if the scope of our work had been
sufficient to enable us to express an opinion on the
financial statements of the Trust Fund, other instances of
noncompliance or other matters may have been identified and
reported herein.

Department's Responses to the Findings

The Department's responses to the findings identified in
our engagement are described in the accompanying Schedule of
Findings. The Department's responses were not subjected to
the auditing procedures applied in the engagement to audit
the financial statements and, accordingly, we express no
opinion on the responses.

Purpose of this Report

The purpose of this report is solely to describe the scope
of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the
effectiveness of the entity's internal control or on
compliance. This report is an integral part of an engagement
to perform an audit in accordance with Government Auditing
Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable
for any other purpose.

Current Findings--Government Auditing Standards

Finding 2021-001--Failure to Implement General Information Technology
Controls Over the Pandemic Unemployment Assistance System

The Department of Employment Security (Department) failed
to implement general Information Technology (IT) controls
over the Pandemic Unemployment Assistance (PUA) System
(System).
In April 2020, the Department contracted with a service
provider to provide the System as a Software as a Service
(SaaS) and to provide hosting services for the System. The
service provider maintained full control over the system.
In order to determine if general IT controls were suitably
designed and operating effectively over the System, we
requested the Department provide a System and Organization
Control (SOC) report for the service provider. As was noted
in the prior audit, the Department could not provide a SOC
report, as the service provider's contract did not require
the service provider to undergo a SOC examination. Therefore,
we conducted testing of the general IT control of the System.
Change Control
As was noted in the prior audit, the service provider's
developers continued to have access to the production
environment. As a result, we were unable to determine if the
developers made unauthorized changes to the environment,
application, and data.
Security
The Department had not implemented internal controls over
the System's access.
Disaster Recovery
The Department had not implemented disaster recovery
controls.
The Security and Privacy Controls for Information Systems
and Organizations (Special Publication 800-53, Fifth
Revision) published by the National Institute of Standards
and Technology (NIST), Maintenance and System and Service
Acquisition sections, require entities outsourcing their IT
environment or operations to obtain assurance over the
entities' internal controls related to the services provided.
Such assurance may be obtained via System and Organization
Control reports or independent reviews. In addition, the
Access Control section, sanctions the implementation of
internal controls over access. The Configuration Management
section also enforces logical restrictions with changes to
systems. Further, the Contingency Planning section makes
compulsory the development of a detailed disaster recovery
plan.
The Fiscal Control and Internal Auditing Act (30 ILCS 10/
3001) requires all State agencies to establish and maintain a
system, or systems, of internal fiscal and administrative
controls to provide assurance funds, property, and other
assets and resources are safeguarded against waste, loss,
unauthorized use and misappropriation and maintain
accountability over the State's resources.
The Department indicated the service provider's contract
did not require a SOC report to be provided. Additionally,
the Department indicated competing priorities resulted in the
other weaknesses.
As a result of the lack of general IT controls over the
System, we were unable to rely on the System and the proper
determination of claimant eligibility data and benefits paid.
Furthermore, as a result of the lack of internal controls
identified in this finding and finding 2021-002, we are
unable to obtain sufficient documentation to determine if the
Department's Fiscal Year 2021 financial statements are fairly
presented. Therefore, we are issuing a disclaimer of opinion
over the Department's Fiscal Year 2021 Unemployment
Compensation Trust Fund financial statements. (Finding Code
No. 2021-001, 2020-001)

Recommendation

We recommend the Department ensure the service provider's
contract requires obtaining a SOC report or an independent
review. We also recommend the Department ensure the service
provider's developers' access is restricted and changes are
appropriate. Further, we recommend the Department develop and
implement security controls and disaster recovery controls.

Department Response

IDES accepts the auditor's recommendation. In 2021, IDES
took action to address the points raised in the finding. The
improvements to the PUA system were implemented within a
timeframe that did not impact the entire 2021 audit period.
As recommended, a contract is in place requiring the PUA
system service provider to secure a SOC report for FY22. The
system access of the PUA service provider's developers has
been restricted

[[Page H2285]]

and accurately documented. In addition, documentation for PUA
system disaster recovery, as well as security controls, are
in place and have been reviewed and documented.

Finding 2021-002--Failure to Maintain Accurate and Complete Pandemic
Unemployment Assistance Claimant Data

The Department of Employment Security (Department) failed
to maintain accurate and complete Pandemic Unemployment
Assistance (PUA) claimant data.
On March 27, 2020, the President of the United States
signed the Coronavirus Aid, Relief, and Economic Security
(CARES) Act which provided states the ability to provide
unemployment insurance to individuals affected by the
pandemic, including those who would not normally be eligible
for unemployment. Based on the Department's records, as of
June 30, 2021, 424,887 claimants had received benefits
totaling $8,168,499,998.
From June 2021 through January 2022, the Department
attempted to provide complete and accurate PUA claimant data
in order to determine if the claimants were properly
determined eligible. After several attempts and considerable
manipulation of the data to make the data more auditable and
organized, it was determined complete and accurate PUA
claimant data could not be provided. Therefore, we were
unable to conduct detailed testing to determine whether the
PUA claimants were entitled to benefits.
The Fiscal Control and Internal Auditing Act (30 ILCS 10/
3001) requires all State agencies to establish and maintain a
system, or systems, of internal fiscal and administrative
controls to provide assurance funds, property, and other
assets and resources are safeguarded against waste, loss,
unauthorized use and misappropriation and maintain
accountability over the State's resources.
Also, due to these conditions, we were unable to conclude
the PUA claimant data records were complete and accurate
under the Professional Standards promulgated by the American
Institute of Certified Public Accountants (AU-C 500.08 and
AT-C 205.35).
The Department indicated the PUA system limitations and
data entry errors resulted in the weaknesses.
Due to the inability to conduct detailed claimant testing,
we were unable to determine whether the Department's
financial statements accurately document the PUA benefits
paid during Fiscal Year 2021. Therefore, we are issuing a
disclaimer of opinion over the Department's Fiscal Year 2021
Unemployment Compensation Trust Fund financial statements.
(Finding Code No. 2021-002)

Recommendation

We recommend the Department implement controls to ensure
the claimants' data is complete and accurate.

Department Response

IDES accepts the auditor's recommendation. The department
continues to work with the PUA system service provider and
the Department of Innovation and Technology (DoIT) staff to
refine the PUA database information and develop a reporting
structure that conforms with auditors' expectations. Errors
and anomalies within the PUA system have been identified and
are being addressed to ensure claimant data is complete and
reliable.

Finding 2021-003--Failure to Perform Timely Cash Reconciliations

The Department of Employment Security (Department) did not
prepare its year end bank reconciliations timely.
As part of our engagement, we requested the June 30, 2021
bank reconciliations. The reconciliations are between cash as
recorded in the Department's general ledger, and cash as
reported by the bank for each account. The Department did not
have the reconciliations prepared timely for audit fieldwork
and we received the final versions of the June 2021
reconciliations on December 23, 2021.
The timely reconciliation of cash accounts is a basic
control procedure that should occur every month to determine
the recorded amount of cash is accurate. Normally this
procedure is performed shortly after the end of the month
upon receipt of the bank statement. Most organizations have a
regular monthly accounting schedule whereby the monthly
general ledger cannot be closed without the preparation of
the cash reconciliation.
Concepts Statement No. 1 of the Governmental Accounting
Standards Board, Objectives of Financial Reporting (GASBCS 1,
paragraph 64), states, ``Financial reporting should be
reliable; that is, the information presented should be
verifiable and free from bias and should faithfully represent
what it purports to represent. To be reliable, financial
reporting needs to be comprehensive.'' The reconciliation of
cash accounts is a basic control to ensure the accuracy and
reliability of financial reports.
The Fiscal Control and Internal Auditing Act (30 ILCS 10/
3001) requires State agencies to establish and maintain a
system, or systems, of internal fiscal and administrative
controls to ensure State resources are used efficiently and
effectively. This includes the timely performance of bank
reconciliations.
Department management indicated the weaknesses were due to
turnover in personnel and the inability to quickly move
employees into this area to perform this function as
workloads increased significantly as a result of the new
CARES Act unemployment programs.
Since the Department has numerous cash transactions every
month, the risk of error due to misapplied cash transactions
is significant. Monthly there can be over $1 billion in cash
that flows through the Department's various cash accounts.
Monthly and annual financial statements could be materially
misstated due to the lack of timely bank reconciliations.
Failure to properly complete timely bank reconciliations
could also result in a misuse or misappropriation of cash
that could go undetected. (Finding Code No. 2021-003, 2020-
004)

Recommendation

The Department should prepare a monthly reconciliation for
every cash account, reconciling the bank and general ledger
balances. Each monthly bank reconciliation should be timely
completed and reviewed and approved by a supervisor.

Department Response

IDES accepts the auditor's recommendation. In 2021, IDES
contracted with a professional accounting firm to assist
department staff with the cash reconciliation work required
for seven programs, including the new federal programs such
as PUA and PEUC that were enacted in response to the
pandemic. In consultation with a professional accounting
firm, department procedures are undergoing review and
revision to ensure cash reconciliations for all programs are
completed on a timely basis.

Prior Findings Not Repeated

A. Failure to Accurately Determine Claimants' Eligibility
for Pandemic Unemployment Assistance:
In the prior audit, the Department of Employment Security
(Department) failed to ensure Pandemic Unemployment
Assistance claimants met eligibility requirements.
In the current audit, the Department was unable to provide
complete and accurate claimant data. Therefore, we were
unable to conduct detailed testing as noted in Finding 2021-
002. We will review the Department's progress in the next
audit. (Finding Code No. 2020-002)
B. Inadequate Controls over Pandemic Unemployment
Assistance Program Processes:
During the prior audit, the Department did not implement
adequate controls over the Pandemic Unemployment Assistance
(PUA) program processes.
In the current audit, as noted in Finding 2021-002, the
Department was unable to provide complete and accurate
claimant data. Therefore, we were unable to conduct detailed
testing. We will review the Department's progress in the next
audit. (Finding Code No. 2020-003)
C. Inadequate Controls over Accruals:
During the prior audit, the Department did not have
sufficient internal control over the determination of
accruals for payments related to both the Unemployment
Insurance program (UI) and the Pandemic Unemployment
Assistance Program (PUA).
In the current audit, as noted in Finding 2021-002, the
Department was unable to provide complete and accurate
claimant data. Therefore, we were unable to conduct detailed
testing. We will review the Department's progress in the next
audit. (Finding Code No. 2020-005)
D. Inadequate Controls over Receivable Allowance:
During the prior audit, the Department did not have
sufficient internal control over the estimate of the
allowance for doubtful accounts recorded in its financial
statements.
In the current audit, as noted in Finding 2021-002, the
Department was unable to provide complete and accurate
claimant data. Therefore, we were unable to conduct detailed
testing. We will review the Department's progress in the next
audit. (Finding Code No. 2020-006, 2019-001)
E. Inadequate Controls over GenTax Access:
During the prior audit, the Department did not ensure
adequate security over the enterprise-wide tax system
(GenTax).
In the current audit, sample testing did not contain
significant errors that would affect the financial
statements. (Finding Code No. 2020-007, 2019-005, 2018-008)

Mr. LaHOOD. Those fraudsters acted with intent and malice and
diverted critical relief for unemployed workers. Early on in the
pandemic, multiple red flags were raised by law enforcement agencies
about the threat of fraudsters using stolen identities to file false
unemployment claims.
The U.S. Secret Service raised the first alarm issuing an alert memo
in May 2020 warning of a well-organized Nigerian crime ring exploiting
the COVID-19 crisis to commit large-scale fraud against State
unemployment insurance programs.
Mr. Speaker, I include in the Record that memo from the U.S. Secret
Service.

May 14, 2020.
From: United States Secret Service.

Massive Fraud Against State Unemployment Insurance Programs

The United States Secret Service has received reporting of
a well-organized Nigerian fraud ring exploiting the COVID-19
crisis to commit large-scale fraud against state unemployment
insurance programs. The primary state targeted so far is
Washington, while there is also evidence of attacks in North
Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and
Florida. It is

[[Page H2286]]

extremely likely every state is vulnerable to this scheme and
will be targeted if they have not been already.
In the state of Washington, individuals residing out-of-
state are receiving multiple ACH deposits from the State of
Washington Unemployment Benefit Program, all in different
individuals' names with no connection to the account holder.
A substantial amount of the fraudulent benefits submitted
have used PII from first responders, government personnel and
school employees. It is assumed the fraud ring behind this
possess a substantial PII database to submit the volume of
applications observed thus far.
This fraud network is believed to consist of hundreds, if
not thousands, of mules with potential losses in the hundreds
of millions of dollars. The banks targeted have been at all
levels including local banks, credit unions, and large
national banks.
Please communicate the information regarding this fraud to
the appropriate office at your local state level and liaison
with local financial institutions to identify mules and
potential seizures.

Mr. LaHOOD. Mr. Speaker, the public needed to know what was happening
to these funds, yet not a single oversight hearing was held at the
time. Democrats turned a blind eye to the fraud and rejected Republican
efforts to stop it.
While considering the American Rescue Act in committee, Democrats
rejected Republican amendments that would have stopped the ``pay and
chase'' model of benefit delivery.
In September of 2022, Democrats voted against a resolution of inquiry
demanding communications showing the Department of Labor had knowledge
of unemployment insurance dollars flowing to international crime
syndicates.
Now, today, Republicans are taking action.
We will not turn our backs and walk away from the greatest theft of
taxpayer dollars in American history.
Currently, State workforce agencies have little incentive to pursue
costly investigations and prosecutions that do not pay out. This bill
here today, H.R. 1163, will jump-start efforts to recover what we can
by making the juice worth the squeeze for States still working through
a backlog of suspicious unemployment claims and appeals.
The number of individuals or entities facing UI fraud-related charges
has grown since March 2020 and will continue to increase as these cases
take time to develop.
Based on an analysis of the U.S. Department of Justice from January
13, 2023, Federal charges were pending against up to 240 individuals
for attempting to defraud pandemic UI programs.
States that take the initiative will be allowed to retain a portion
of the recovered funds to prevent future fraud by using the recovery
reward to improve program integrity, including hiring investigators to
go after criminals and modernizing State systems.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. SMITH of Missouri. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Illinois.
Mr. LaHOOD. Mr. Speaker, this bill allows a State to retain 5 percent
of the recovered UI overpayments. This includes having commonsense
procedures in place, like preventing UI benefit payments from going to
incarcerated people and deceased people.
We have an opportunity today to gain some restitution for American
taxpayers.
Mr. Speaker, I urge my colleagues to support H.R. 1163.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 90 seconds to the
gentleman from Texas (Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, after President Trump twiddled, while
thousands of Americans died of COVID, we entered a national crisis. In
that emergency, the Trump administration, the Biden administration, and
the States did not do enough to prevent fraud in this and other
programs.
If Republicans were genuinely interested in strengthening any fraud
efforts, as I certainly am, we could, today, approve bipartisan
legislation to do that. Instead, they rejected many of the important
recommendations from their own witnesses before our committee from the
Government Accountability Office and the inspector general told us were
necessary.
Instead of protecting taxpayers today from fraud, they use this
misnamed bill to actually cut the very funding that is required for any
fraud and recovery of wrong payments. When millions of Texans found
themselves out of a job, the Texas Workforce Commission was not ready
to provide a lifeline.
Even in the middle of the night, my neighbors could not get through
to get the insurance to which they were entitled. Little wonder that
the same State agency did a sorry job of preventing fraud.
The vast majority of Texans, who eventually received unemployment,
were entitled to it, unlike apparently an indicted member of the
Republican Caucus. Our unemployment insurance system should be
strengthened, not undermined, as this very bill would do.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2 minutes to the
gentleman from Pennsylvania (Mr. Smucker).
Mr. SMUCKER. Mr. Speaker, I thank the chairman for yielding.
Mr. Speaker, the premise of this bill is simple: Criminals and
fraudsters should be held accountable for dollars that were illegally
obtained, and we ought to ensure that this doesn't happen again.
We can argue, we can talk about how we got here, who is responsible,
but I can tell you, as a member of the Ways and Means Committee,
Republicans spent the last 3 years pleading with the Biden
administration and with Democrats for answers on the impact of
unemployment fraud, for ways to stop it, and the steps that we need to
recover as much of it as possible. Unfortunately, it fell on deaf ears,
and now we have some counts as high as $400 billion that were lost to
fraud or improper payments under the program.
That is money that should have been supporting our constituents that
were struggling from job loss during the pandemic. Instead, it went to
criminals and cheats.
In my district, too many unemployed individuals could not access
payments because those benefits had already been claimed by scam
artists.
Similarly, for the last two tax filing seasons, many of my
constituents have only found out then that they were a victim of
identity theft when they got a 1099 in the mail that says they owe
taxes on unemployment benefits they never claimed.
Now, they are stuck fighting the IRS to rectify their tax bill and
hung out to dry trying to reclaim their identity. Finally, after 3
years, House Republicans are taking this important step today to right
this wrong. This legislation gives States both the incentives and the
tools needed to prosecute criminals and recover fraudulent payments.
It takes the steps that we should have taken 3 years ago to prevent
fraud in the first place. I do want to be clear: This bill is not about
taking away employment benefits from those who relied on them, who
needed them during the pandemic.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. SMITH of Missouri. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Pennsylvania.
Mr. SMUCKER. It is not about taking away unemployment benefits for
those who relied on them. It is quite the opposite. This bill goes
after those who robbed unemployment benefits from those who need it.
Mr. Speaker, I am hopeful that my colleagues on the other side of the
aisle will recognize that this is commonsense legislation to right a
wrong and to protect our constituents and our taxpayers.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from California (Mr. Thompson).
Mr. THOMPSON of California. Mr. Speaker, I thank the gentleman for
yielding.
Mr. Speaker, the COVID-19 pandemic significantly impacted the
economies of every country around the world, resulting in great
economic shutdown. However, our country, the United States, came out of
the pandemic ahead of other nations because we expanded programs such
as unemployment insurance.
Sadly, this bill seeks to target Americans who received overpayment
from the government at no fault of their own instead of going after
those who committed fraud.
During the bill's markup and later in the Rules Committee, I offered
an amendment that would amend the criminal code to extend the statute
of limitations to 10 years, as recommended by the Department of Labor
Inspector General and legal experts so we could get the crooks.

[[Page H2287]]

However, the Republicans decided to go after public servants and
retirees instead of the criminals. One of the other members said that
criminals and cheats need to be brought to justice. They do. Extend the
statute of limitations and we can do it. We can catch the bad guys. We
can catch the crooks. We can get the taxpayer money back.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2\1/2\ minutes to the
gentlewoman from New York (Ms. Tenney).
Ms. TENNEY. Mr. Speaker, I rise in support of H.R. 1163, the
Protecting Taxpayers and Victims of Unemployment Fraud Act. This bill
makes meaningful strides to recover hundreds of billions of dollars in
fraudulent unemployment benefits.
Congress has the responsibility to oversee our Nation's unemployment
programs and rein in rampant fraud. Unfortunately, for years, Democrats
virtually refused to acknowledge the extent of this issue while
taxpayers and small businesses in New York's 24th District were forced
to foot the bill.
Criminal organizations, including international cybercrime rings and
other foreign actors, even exploited this national crisis to steal
billions from taxpayers.
The exact amount of unemployment fraud resulting from the pandemic is
not known. Estimates are wide-ranging with some encompassing only
improper payments due to fraud, and others focused on all improper
payments, including those resulting from administrative error.
The Government Accountability Office found at least $60 billion in
fraud as they testified before our committee. However, according to
recent testimony from the Department of Labor Inspector General,
improper payments and pandemic unemployment programs have saddled
taxpayers with at least $191 billion in fraud, as was testified before
our committee. Some experts suggest this number could be as high as
$400 billion.
New York alone is estimated to have paid as much as $11 billion in
fraudulent unemployment benefits since March 2020. On top of all of
this, New York has an outstanding trust fund loan of nearly $8 billion,
which it has yet to repay.
Because of New York's gross mismanagement, taxpayers and small
businesses must now make up the difference. After all the hardships
they have endured over the past several years, how can it possibly be
fair to ask them to pick up the tab for the government's negligence and
incompetence?
Now, under House Republicans and the leadership of Jason Smith,
Congress is finally taking steps to recover these valuable taxpayer
dollars.
Mr. Speaker, I urge support for this bill from all of my colleagues.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Oregon (Mr. Blumenauer).

{time} 1500

Mr. BLUMENAUER. Mr. Speaker, I am having flashbacks in terms of what
we were facing in 2020. Every member of my office was working to try
and deal with panicked people who couldn't get through to get their
unemployment in a system that was bogged down, 600 percent increase.
Now, we are taking up legislation that would cut fraud-fighting
dollars and hold hardworking Americans liable for overpayments that
were not necessarily their fault. Families would be forced to repay
these funds up to 10 years later. Even the Congressional Budget Office
has said there is uncertainty about how much would be recovered.
I was in the middle of that. I saw the panic, the challenge, and
despair. I think it would be far better to take advantage of extending
the statute of limitations so we make sure we can claw it back. But
don't punish people who may be caught up in this net that was not of
their making.
I strongly urge that we reject this, that we deal with ways to
increase the statute of limitations and recover the money that needs to
be recovered.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
My colleagues on the other side have noted their objection to this
bill's rescission of unobligated COVID funds sitting unused at the
Department of Labor. They claim these funds are important in combating
UI fraud, but the reality couldn't be further from the truth.
Mr. Speaker, I include in the Record a February letter from the
Missouri Department of Labor and Industrial Relations.

Department of Labor

& Industrial Relations,

Jefferson City, MO, February 6, 2023.
Hon. Jason Smith,
Chair, House Ways and Means Committee, Washington, DC.
Dear Chairman Smith: Thank you for the opportunity to share
the Missouri Department of Labor & Industrial Relations,
Division of Employment Security's experience in administering
and combatting fraud in the unemployment insurance (UI) and
federal CARES Act programs throughout the duration of the
COVID-19 pandemic.
Missouri's Governor declared a state of emergency on March
13, 2020, and Missouri entered into an agreement with the
United States Department of Labor (USDOL) to administer the
federal CARES Act program on March 28, 2020. In a span of
only three weeks, Missouri realized an increase of over 3000%
in unemployment insurance claims. In addition to the historic
increase in workload, the combination of state and new
federal programs expanding eligibility and dramatically
increasing monetary benefits, rapidly evolving federal
guidance, rampant media coverage, and misinformation made for
an extremely challenging environment for program
administration.
Federal programs, such as Pandemic Unemployment Assistance
(PUA), initially only required self-attestation to qualify
and allowed individuals to backdate their PUA claims, lacked
the checks and balances inherent within the state's regular
Unemployment Insurance program that are a key component of
program integrity. Additionally, eligibility for a single
dollar of benefit under any unemployment program
automatically qualified the individual to receive a
substantial supplemental Federal Pandemic Unemployment
Compensation (FPUC) payment, inviting and incentivizing
individuals and bad actors to attempt to collect benefits to
which they were not entitled. Constantly changing guidance
for the CARES Act programs added to the burden by creating
additional workloads, complexity and confusion. For example,
PUA guidance from the USDOL was amended four times in a
period of less than 6 months, and much of the amended
guidance applied retroactively to the beginning of the
pandemic assistance period for claims already processed.
Fortunately, in 2016 Missouri replaced its legacy mainframe
system with a modernized unemployment insurance application.
Prior to the pandemic, Missouri had existing identity
verification and fraud detection tools in place. This gave
Missouri the ability to address the CARES Act program
implementation challenges and successfully identify potential
threats and prevent both small and large-scale fraud attacks
that plagued some states, with nationwide estimates of
potential fraud overpayments exceeding $45 billion according
to the USDOL--Office of Inspector General (OIG). However, in
response to unprecedented fraud attacks, Missouri
continuously reviewed and modified its fraud detection tools
and methods. As a result, funding administered by the USDOL
for improved program integrity was mostly leveraged for the
provision of additional staffing resources to address the
increased volume of work and support enhancement of the
existing technologies.
More recent funding opportunities, such as the Equity and
Tiger Teams grants, provide limited flexibility to address
program integrity and ongoing fraud prevention strategies.
The Equity Grant is focused on improving recipiency and
equitable access to the UI program. The Tiger Teams grant
identifies three focus areas to be addressed, ``equity and
access, backlogs and timeliness, and integrity.'' Bad actors
are constantly striving to find new innovative ways to
defraud benefit programs and avoid detection. As such,
Missouri must continue to innovate and invest in fraud
prevention strategies and tools that prevent our states and
our citizens from becoming the next victims. The existing
use, at the federal level, of the Resource Justification
Model for funding UI administration and one-time grant
opportunities, fall short in meeting this need. Therefore,
prioritization should be given to consistent funding that not
only permits states to implement proven strategies and tools
to combat fraud but also provides states the ability to
support and maintain these solutions into the future.
Missouri will continue to place UI program integrity as a
critical priority. I appreciate this opportunity to share
Missouri's experience with the challenges we faced
administering the federal programs throughout the pandemic.
Sincerely,
Anna S. Hui,
Department Director.

Mr. SMITH of Missouri. In it, my State's workforce directory notes
their experience with tiger teams.
It says: ``More recent funding opportunities, such as the equity and
tiger team grants, provide limited flexibility to address program
integrity and ongoing fraud prevention strategies.''

[[Page H2288]]

This doesn't sound like a glowing review.
I welcome Democrats to share any information that they have that the
Department of Labor's efforts have helped us recover dollars for
American taxpayers.
Mr. Speaker, I yield 3 minutes to the gentleman from Kansas (Mr.
Estes).
Mr. ESTES. Mr. Speaker, I rise today in support of the Protecting
Taxpayers and Victims of Unemployment Fraud Act.
Right now, our Federal Government is borrowing one out of $5 we
spend, over $45,000 a second. This fact alone should outrage every
American.
Yet, we face another outrageous problem here in the swamp: Waste,
fraud, and abuse. Not only are we borrowing at historic rates, but we
are borrowing to cover the costs of rampant fraud that exists
frequently unchecked in our system.
This was magnified during the height of the COVID-19 pandemic. While
there were good reasons to expand unemployment benefits when many
Americans were displaced from work through no fault of their own, we
are already 3 years removed from the passage of the CARES Act.
The pandemic emergency declaration is over; not because the Biden
administration followed the science and voluntarily gave up their
emergency powers, but because House Republicans and the Senate came
together to force the Biden administration to end the pandemic
emergency declaration.
One troubling data point that has emerged is the unemployment claims
as a percentage of unemployed workers. This was 37 percent in February
2020, right before the pandemic came to our shores. Yet, by August of
the same year, it had climbed to 216 percent.
The data is clear, we were paying massive amounts of unemployment to
people who were not unemployed. It is estimated that of the $873
billion in total pandemic UI benefits disbursed, about $357 billion
went to fraudulent claims.
No Member of Congress should be comfortable telling their
constituents that they don't care about wasting nearly $400 billion of
taxpayer money.
In my home State, a forensic audit found that the State of Kansas
paid up to $466 million in unemployment fraud. While this massive fraud
was occurring, hardworking, unemployed Kansans were competing with
fraudsters to receive the unemployment benefits they deserved and so
desperately needed.
In my office in Wichita, we received countless calls from Kansans who
were trying to reach an ineffective Kansas Department of Labor.
One constituent waited over half a year after her claim mysteriously
ended up in the fraud department. Others reached out to let me know
they had been victims of fraud, some receiving a 1099 claiming they
owed taxes on benefits that somebody else received.
These cases point to a real problem in Kansas and across the country.
Taxpayers lost out to fraudsters who used the pandemic, vast sums of
Federal Funds and weak State leadership to game the system.
Thankfully, there is a solution that protects the taxpayers and reins
in the fraud we have seen in unemployment insurance. The Protecting
Taxpayers and Victims of Unemployment Fraud Act won't make everybody
whole, but it ensures that some of the hundreds of billions of dollars
are recouped, and it lets States keep 25 percent of those funds so they
can improve their own unemployment insurance systems.
To be clear, unemployment is a critical lifeline that helps Americans
during a challenging time. When bad actors abuse the program, it hurts
those who actually need it by taking away monetary and human resources.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. SMITH of Missouri. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Kansas.
Mr. ESTES. The bill is the right and fair approach to ensure
unemployed Americans have full access to the assistance they need and,
when done correctly, encourages those individuals to get back into the
workforce.
Tackling waste, fraud, and abuse in unemployment insurance shouldn't
be a partisan issue. It rights a wrong and is just common sense.
Mr. Speaker, I encourage my colleagues to join me in this commonsense
legislation that puts taxpayers first.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, the other side, respectfully, Republicans,
created a once-in-a-century crisis, once in a century. They are holding
this sham debate to distract us.
In 2021, Democrats passed the American Rescue Plan. It had a very
strong fraud protection section. I hope you read it. Our unemployment
aid was a gigantic success, by the way. It kept families together and
it saved lives.
Republicans claim to care about misuse, but when we passed real fraud
protections, every single one of you voted ``no.'' That is the record.
It is clear.
House Republicans are harboring a disgraced fraudster who was just
arrested on unemployment fraud. You cannot make this up.
We are prosecuting fraud. States recovered over $100 million.
Enforcement is working. This is not about fraud or about saving money.
The SPEAKER pro tempore. The time of the gentleman has expired.
Members are reminded to direct their remarks to the Chair.
Mr. PASCRELL. Mr. Speaker, you took the rest of my time.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. PASCRELL. Sir, you took the rest of my time.
The SPEAKER pro tempore. The gentleman's time has expired.

Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentlewoman from California (Mrs. Steel).
Mrs. STEEL. Mr. Chairman, as we all now know, pandemic unemployment
assistance funds became the source of the greatest theft of taxpayer
dollars in American history.
Estimates put the total amount of assistance lost to fraud as high as
$400 billion. California alone lost around $60 billion under the
leadership of President Biden's Secretary of Labor nominee Julie Su.
As Californians in particular continue struggling under spiking
prices and high taxes, it is absurd to force them to foot the bill for
fraud committed while their leaders were asleep at the wheel.
That is why I am proud to support the Protecting Taxpayers and
Victims of Unemployment Fraud Act, which will address this
unprecedented theft by incentivizing States to recover these stolen
funds and providing the tools to prevent future fraud.
Government caused this problem, and it owes the American taxpayers a
solution. I urge all my colleagues to vote ``yes'' on this measure to
provide the fiscal oversight we were sent here to deliver.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Pennsylvania (Mr. Evans).
Mr. EVANS. Mr. Speaker, this bill is not about addressing fraud. My
home State of Pennsylvania is already fighting fraud with the American
Rescue Plan funds that support new positions at American Job Centers.
This bill targets innocent workers who have no idea that their State
made mistakes in paying their unemployment benefits.
This bill targets innocent workers whose emergency benefits kept
their households afloat.
The bill targets innocent workers who went back to work as soon as
they could and often for lower pay.
I urge my colleagues to let States focus on real fraud and protect
innocent workers by voting against this bill.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentleman from Ohio (Mr. Carey).
Mr. CAREY. Mr. Speaker, I rise in support of H.R. 1163.
Our jobs recovery has been hampered by bloated COVID relief benefits
that paid people more not to work, while criminals and fraudsters were
lining their pockets with billions in taxpayer funds from expanded UI
programs.
We are not talking about everyday fraud or administrative error. We
are talking about fraud that was committed with intent, both
domestically and by foreign nation-state actors that, frankly, used
COVID relief to conduct economic warfare against American citizens and
put our national security at risk.

[[Page H2289]]

In my home State of Ohio, it was estimated that $1 billion may have
been paid in fraudulent unemployment from March of 2020 to June of
2022.
Now, my friends on the other side are arguing against this bill and
the administration has just released a Statement of Administration
Policy opposing this bill.
The fact is, the President's Fiscal Year 2024 budget request includes
several of the very same fraud recovery and prevention measures that my
colleagues across the aisle are railing against today. Three of the
proposals in the President's budget are nearly identical:
Allowing States to keep 5 percent of recovered overpayments and
reinvest those dollars in program integrity and fraud prevention;
Matching unemployment claims data against the National Directory of
New Hires to verify when somebody that is receiving unemployment
becomes employed; and
Extending the statute of limitations for criminal charges and civil
actions for prosecuting fraud from 5 to 10 years.
After declaring that ``the watchdogs are back'' in his first State of
the Union, it has taken the President nearly 2 years to finally embrace
the antifraud policies that we Republicans are calling for today.
Were the President to veto this bill, he would be vetoing the very
same policies he endorsed.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Illinois (Mr. Schneider), my home State.
Mr. SCHNEIDER. Mr. Speaker, we all share the goal of fighting fraud.
As my colleague just said, there are things that we can and do agree
on, but this bill isn't that.
Our focus should be on going after those who stole unemployment
insurance money and fixing the broken systems that enable them.
Instead, the Republicans' bill seeks to claw back funds included in
the American Rescue Plan that would allow the States to do what we are
asking today.
Mr. Smith's bill will make it easier for the bad guys to cheat the
system, not harder, and it will hurt the hardworking, law-abiding
citizens.

Countless honest taxpayers hit hard by the pandemic followed the
rules of their State, received their benefits, and used those funds to
pay for their children's healthcare, to pay their rent, and simply to
make ends meet. They had no way of knowing the State had mistakenly
overpaid them.
During the markup, I asked Chairman Smith what protections were
included in this bill to ensure that honest taxpayers didn't get
surprise bills or face prosecution from States.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. DAVIS of Illinois. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Illinois.
Mr. SCHNEIDER. During the markup, I asked what protections were in
place to protect those honest taxpayers. Neither the Chair nor any of
my Republican colleagues could point to any protections.
While both sides of the aisle care about fighting fraud--and I know
we do--this bill makes clear that only Democrats care about protecting
hardworking, honest Americans from receiving surprise bills and being
treated like criminals.
Mr. SMITH of Missouri. Mr. Speaker, I yield 2 minutes to the
gentleman from Utah (Mr. Moore).
Mr. MOORE of Utah. Mr. Speaker, I rise today in support of H.R. 1163,
the Protecting Taxpayers and Victims of Unemployment Fraud Act, which
addresses the urgent need to safeguard taxpayer dollars from
unemployment insurance fraud schemes.
One of our most crucial oversight duties is to ensure the responsible
use of taxpayer funds. Recent reports from the White House, GAO, the
Department of Labor, and other organizations have exposed the alarming
theft of up to $400 billion in taxpayer dollars due to unemployment
insurance fraud during the COVID pandemic.

{time} 1515

This revelation demands immediate action. What we are trying to
accomplish here is to show a plan that is feasible to be able to go
after this fraud.
My colleagues on the other side of the aisle talk about wanting to go
after fraud, too. These arguments that we are talking about are missing
the point. This bill will go after the fraud that took place. We
introduced H.R. 1163, and it will help enable the recovery of lost
dollars, ensuring that this stolen money is reclaimed.
While fraud has been widespread across this Nation, some States have
demonstrated success in minimizing these losses. In Utah, my home
State, overpayment due to fraud consisted of less than 1 percent of
total benefits disbursed. I am proud of this.
Our leaders in Utah have done an excellent job managing and
protecting these resources thanks to the systems and processes
implemented by former Governor Herbert, Governor Cox, their
administrations, and the Utah State legislature.
The Federal Government must now work to restore public trust. It
starts with holding bad actors accountable. This bill will enable that
by strengthening the integrity of our systems for the future and
encourage States to be proactive rather than reactive.
Mr. Speaker, I urge my colleagues to support this fiscally
responsible bill.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the
gentlewoman from Texas (Ms. Jackson Lee).
Ms. JACKSON LEE. Mr. Speaker, let me say that I believe in border
security at the southern border. I also believe in the fact that we are
a land of immigrants, as well as a land of laws.
Here we have two bad bills that don't fix the immigration and border
security problem, and in this bill, we are not fixing any problem with
fraud.
Let me explain to my colleagues and also the American people: This
takes away $400 million that we use to eliminate fraud. How does that
work, in H.R. 1163? This bill is to claw back funds that people
allegedly received accidentally.
This is what will happen. Let me tell you what they are going to do.
They are going to make sure that law enforcement and first responders,
who were out in public during the pandemic every day, will receive a
bill because they accidentally received an overpay.
I had an amendment to exempt law enforcement which was rejected. They
wouldn't take that amendment. We are, in fact, coming upon National
Police Week next week when we honor and memorialize law enforcement.
They wouldn't take the amendment to exempt firefighters. I saw them
out in the community when I was out in my district, testing,
administering vaccinations, tending to people in crisis during the
pandemic. They were out in our communities.
Additionally, they wouldn't take an exemption of schoolteachers. This
is a bad bill. Why are you punishing our law enforcement, first
responders, fire fighters, teachers, and others?
Let us take this bill off the table and go back to the drawing board.
We are losing. We are not gaining.
Mr. Speaker, I am here today to reassert my opposition to the
proposed legislation H.R. 1163--Protecting Taxpayers and Victims of
Unemployment Fraud Act, and to again assert the need for strong
reconsideration for the harm and damage this bill will do to the
American people.
H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud
Act, quite simply a harmful bill that would strip state Unemployment
Insurance (UI) programs of essential resources to fight fraud, combat
identity theft, and recover overpayments, and would set back the goals
of strengthening program integrity and combating systemic fraud.
H.R. 1163 would undermine the integrity of the UI system and allow
states to send surprise bills to workers for overpayments of
unemployment benefits paid during the pandemic as long as 10 years
after the overpayment occurred.
This bill takes no consideration into the fact that the overpayments
were made to workers who did nothing wrong, did not know they were
overpaid, spent the money on necessities, and returned to work as soon
as they could. Workers did not know they were overpaid at the time (and
will not know until they receive a surprise bill).
This ``anti-fraud'' legislation would do more harm than good,
penalizing America's essential workers who did nothing wrong while
slashing funding from programs holding criminals accountable.
It makes no sense that we would not do everything we can to protect
special populations of workers and continue to support them as
essential workers--as those who hold the fabric of our communities
together, especially in our most desperate and fragile times of need.

[[Page H2290]]

In fact, I along with my colleagues have attempted to address many of
the ills this bill purports by offering common sense amendments that
Republicans have continued to refuse any meaningful consideration.
My first amendment for H.R. 1163, listed on the Rules Committee
roster as Amendment No. 41, would have required states to waive
overpayments of pandemic unemployment benefits that were made to law
enforcement personnel and security in 2020 or 2021 who were without
fault in the UI overpayments.
My second amendment for H.R. 1163, listed on the Rules Committee
roster as Amendment No. 42, would have required states to waive
overpayments of pandemic unemployment benefits that were made to
firefighters and emergency personnel in 2020 or 2021 who were without
fault in the UI overpayments.
And my third amendment for H.R. 1163, listed on the Rules Committee
roster as Amendment No. 43, would have delayed enactment until the
Secretary certifies that no provision would result in school
personnel--including teachers and support staff--in 2020 or 2021
without fault in the UI overpayment would be forced to repay
overpayments due to state error.
These are common-sense amendments that have been repeatedly
disregarded by my colleagues across the aisle who have instead chosen
to put forward legislative attacks on our most vulnerable populations.
It is time we stop the negativity and counterproductive efforts that
are ripping apart our country, and to instead focus on coining together
to work towards sensible and effective solutions that can work for the
betterment and growth of our country.
This bill is largely opposed by Americans who see right through the
misguided language purporting to go after fraud but really goes after
hardworking American citizens.
In my home state of Texas and across the country labor unions have
reached out to urge a no vote on this bill and I stand with them in
strong opposition to this wayward measure.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentleman from North Carolina (Mr. Murphy).
Mr. MURPHY. Mr. Speaker, I rise today in strong support of H.R. 1163,
the Protecting Taxpayers and Victims of Unemployment Fraud Act.
During the COVID-19 pandemic, we saw the words ``unprecedented''
many, many times. Today we stand at an unprecedented crime scene.
During the course of the pandemic, the American taxpayers were
subjected to one of the greatest heists ever committed, to the tune of
about $191 billion in improper unemployment payments.
My colleague across the aisle said: Yeah, they received the money
accidentally. Well, if I walk up across the street and find a $20 bill
accidentally dropped by someone else, do I not owe that money back to
them? Is it mine to keep? No, it is not. It is to be given back. This
is what was done from payments to the American taxpayers who did not
deserve the money.
Of course, the spending spree by the Biden administration wants to
continue by adding ballooning debt to our national deficit.
Today, House Republicans are presenting a solution to this
unprecedented problem. We are not raising taxes or spending our
grandchildren's money. We are merely asking for money back that was not
owed to those people.
It is simple. Why not reclaim the billions of dollars in improper
payments before spending another cent of taxpayer money? Even
schoolchildren would understand what is at issue.
It is past time to rectify this disaster and hold those accountable
who got money that they did not deserve.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Illinois (Mr. Foster).
Mr. FOSTER. Mr. Speaker, as Congress' physicist and computer chip
designer, I rise to make this simple point, that the massive levels of
UI fraud and identity fraud generally did not happen in countries that
have a secure and trusted digital ID system.
This is well known to residents of many States as the mobile ID, or
digital driver's license, that allows a REAL ID compliant driver's
license to be placed under your smartphone and to use the unique
hardware ID of your phone and its biometric login capabilities to prove
that you are who you say you are online or in person and to prevent
anyone from impersonating you.
Last session of Congress, we came within a whisker of getting it
included in the omnibus, that the Federal Government should start
recognizing this proven form of digital ID.
Unfortunately, H.R. 1163 is a bill that is designed to fail in the
Senate. If we start working with our Senate colleagues, I think we have
a chance of making real progress on this.
Mr. SMITH of Missouri. Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Virginia (Mr. Beyer).
Mr. BEYER. Mr. Speaker, I stand in opposition to this bill. It is
nothing more than a disingenuous attempt to undermine the Federal
unemployment insurance program, which provided a critical lifeline to
millions of Americans during the pandemic.
My Republican colleagues say they are concerned about unemployment
fraud. I am, too.
However, this bill does nothing to claw back stolen UI funds. In
fact, it would go a long way toward stopping the ongoing successful
work by the Federal Government to fight fraud and hold criminals
responsible.
It would rescind $2 billion in funding provided to the Department of
Labor to strengthen the UI system and improve fraud detection and
prevention and replace it with a bizarre set of incentives for States
to go after ordinary workers who were overpaid, through no fault of
their own, years after the fact.
The Department of Labor assistance facilitated by the American Rescue
Plan made a huge difference in my State of Virginia. Following the
guidance, we were able to make a significant dent in the unemployment
insurance appeals backlog that has plagued our State system for years.
There is no question our unemployment system needs improvement, but
this bill would make the system more vulnerable to fraud.
Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentlewoman from New York (Ms. Malliotakis).
Ms. MALLIOTAKIS. Mr. Speaker, since House Republicans have been in
control, we have brought transparency to the people's House. We are the
ones who are protecting taxpayers. We are the ones exposing waste,
fraud, and abuse, including as high as $400 billion in COVID relief and
unemployment fraud.
Sadly, my home State of New York ranks near the top of the list, with
an estimated $11 billion in this fraudulent unemployment benefits.
These taxpayer dollars went to fraudsters, many overseas, as far as
China, Russia, and Nigeria. They even went to dead people.
They spent it on Rolex watches, fancy furnishings, and designer goods
at Louis Vuitton, Chanel, Burberry, Gucci; $10 million on a villa in
the Dominican Republic; $3.5 million on a mansion in New Jersey; a
charter jet to get the fraudster who purchased it to and from;
Porsches, Ferraris, Bentleys, BMWs, and Mercedes Benz. One person even
received $1.5 million over a span of 10 months.
Meanwhile, my district offices in Staten Island and Brooklyn had to
help dozens of constituents who had their identities stolen and could
not get the unemployment benefits they desperately needed.
New York had to take an $8 billion loan from the Federal Government,
which it has not paid back yet, by the way, to cover all of this. Now,
our small businesses are paying the price with higher
unemployment assessments.

The bottom line is, this bill would help crack down on this type of
fraud, would give law enforcement the statute of limitations it needs
for criminal charges or civil actions, incentivizes States to help us
crack down and recover these fraudulent payments, and stops
unemployment insurance payments to incarcerated and deceased people.
Mr. Speaker, I don't know how anyone can't support this bill. Thank
you.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the gentleman
from Nevada (Mr. Horsford).
Mr. HORSFORD. Mr. Speaker, I thank the distinguished ranking member
of the House Ways and Means Work and Welfare subcommittee for the time.
Mr. Speaker, this bill, the surprise billing our workers act, is
another extreme MAGA attempt that threatens to punish hardworking
constituents whom, at no fault of their own, may have been overpaid
unemployment insurance benefits.

[[Page H2291]]

If deficiencies and errors on the part of the unemployment
authorities in each State caused an overpayment, this bill would allow
the government to go after those funds for up to 10 years.
Imagine that. Constituents in my district in North Las Vegas, who
have been working hard, paying their bills, and taking care of their
families, suddenly get a surprise bill that says that they owe hundreds
or even thousands of dollars.
On top of that, you want to go after fraudulent people gaming the
system. We have laws and resources in place to go after networks and
individuals who purposely try to get money that they are not entitled
to.
Just look at the Member from the other side of the aisle who was
indicted yesterday for unemployment fraud, among other things.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. DAVIS of Illinois. Mr. Speaker, I yield an additional 1 minute to
the gentleman from Nevada.
Mr. HORSFORD. Mr. Speaker, last Congress, I introduced the
Unemployment Insurance Technology Modernization Act, which would
prevent fraud and address the technical shortcomings of many State
unemployment programs. I would ask my colleagues on the other side of
the aisle to work with me and other colleagues to actually provide
solutions.
Stop targeting our constituents. Let's go after the corporate cartels
that are involved in this fraud of our unemployment insurance, but
let's protect the unemployment program, which is a bridge to people who
need it. My constituents faced the second highest unemployment during
the pandemic. I will fight for them every step of the way.
Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may
consume.
Democrats are falsely claiming that this bill claws back relief funds
from Americans who received an overpayment through no fault of their
own.
The language in this bill is crystal clear. It is focused on
recovering overpayments due to fraud. That means intent on the part of
the individual. Existing law already protects individuals who receive
overpayments through administrative error or otherwise. In fact,
section 2401 of the CARES Act allows States to waive overpayments on a
case-by-case basis if the payment would be contrary to equity and good
conscience.
This bill also explicitly states in section 2(a)(2) and section
2(a)(3) that ``the State agency may retain 25 percent of any amount
recovered from overpayments of pandemic emergency unemployment
compensation''--this is the one you need to understand--``that were
determined to be made due to fraud.'' Not overpayment. Due to fraud.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, may I inquire as to how much time
is remaining?
The SPEAKER pro tempore. The gentleman from Illinois has 14 minutes
remaining. The gentleman from Missouri has 3\1/2\ minutes remaining.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the
gentlewoman from California (Ms. Kamlager-Dove).
Ms. KAMLAGER-DOVE. Mr. Speaker, I rise to condemn Republicans' attack
on our workers. The GOP's surprise billing our workers act would allow
States to send surprise bills to workers for unemployment benefits
overcompensation paid to them during the pandemic for as long as 10
years after the overpayment was issued.
Is it the job of the American people to keep the receipts of 10 years
past of UI payments so that they don't go to jail?
People who applied for these benefits and were overpaid did not know
they had been overpaid. These were the result of a government mistake.
To add salt to the wound, Republicans want to cut fraud prevention
programs by $400 million over the next 5 years. Unbelievable.
This legislation hurts our State employee unions by allowing States
to contract out jobs, which is what led to this mess in the first
place.
Let's be clear: This is an old trope from the Republican playbook.
Blame and demonize poor and Black women, insinuating they are gaming
the system, when Republicans have their own welfare queen to deal with.
How can you possibly lecture Americans about paying their bills when
you fail time and time again to come together and meet your financial
obligations as a country?

{time} 1530

Mr. SMITH of Missouri. Mr. Speaker, I yield 1\1/2\ minutes to the
gentleman from Indiana (Mr. Yakym).
Mr. YAKYM. Mr. Speaker, I rise today in strong support of H.R. 1163,
the Protecting Taxpayers and Victims of Unemployment Fraud Act.
The Department of Labor's inspector general pegs pandemic-era
unemployment insurance fraud at $191 billion, though other experts say
it could run as high as $400 billion. These are staggering figures.
This fraud enriched criminals. It harmed innocent Americans who faced
processing delays, stolen benefits, and stolen identities. These were
not victimless crimes.
H.R. 1163 takes a couple of important and commonsense steps toward
addressing this fraud.
First, it extends the statute of limitations so that we can continue
to investigate reports, recover taxpayer dollars, and prosecute the
fraudsters.
More importantly, it incentivizes States not just to recover
fraudulent payments but to shore up their systems against future fraud
by allowing them to use a portion of recovered funds for program
integrity and fraud prevention efforts.
The unemployment insurance program is an important part of our safety
net that helps Americans recover from a job loss. The pandemic exposed
major flaws that are in desperate need of attention.
I support the bill before us today because we shouldn't just catch
the fraud that was. We need to stop the fraud that will be. H.R. 1163
takes steps to ensure that we in Congress and Americans across the
country have faith in this program to deliver during difficult times.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 1 minute to the
gentlewoman from California (Ms. Chu).
Ms. CHU. Mr. Speaker, I rise in opposition to this surprise billing
our workers act.
This bill would harass workers with surprise bills for unemployment
benefits that were overpaid due to State errors. These workers, many of
whom worked long hours for low wages, rightfully used these benefits on
basic needs, such as utilities, rent, and groceries, with no way of
knowing that there was a mistake.
State agencies were simply not equipped to expeditiously get out
pandemic unemployment benefits, resulting in a number of overpayments
to workers who filled out their applications honestly in States led by
Governors of both parties.
There is no denying that there were wrongdoers who exploited the
emergency programs set up by Congress to assist American workers.
However, this is not an excuse to go after honest Americans who did
nothing wrong.
Mr. Speaker, I urge my colleagues to vote ``no'' on this bill.
Mr. SMITH of Missouri. Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield 2 minutes to the
gentlewoman from Ohio (Mrs. Sykes).
Mrs. SYKES. Mr. Speaker, before I joined Congress, I was a State
representative in the great State of Ohio. During the pandemic, my
office fielded hundreds if not thousands of calls from parents,
seniors, veterans, farmers, and families, all who needed help, and we
did.
Unbeknownst to my constituents, the IT systems at the State agencies
in Ohio processed those claims. Those IT systems needed to be updated.
The staff roles had been decimated and protections were not in place.
Months after those families sighed a breath of relief, they received a
letter demanding repayment.
Mr. Speaker, if you have never been on the other end of a phone call
where someone has cried or wailed in fear of financial ruin or about
how they are going to feed their families or pay their bills or get
their medication, I can understand why you would vote for this bill.
Unfortunately, Mr. Speaker, I have, and I cannot support this
legislation.
Mr. Speaker, I understand the need to stop fraud, and I understand
the need to do this work. I look forward to doing it with you someday,
but this

[[Page H2292]]

bill would not do it. In fact, it actually eliminates $2 billion of the
funds to update the system that caused this problem and put my
constituents in this situation in the first place.
Mr. Speaker, I was sent here to fight for families, to lower costs--
not to criminalize Americans--and to support them with bills that will
help their families live the American Dream.
Mr. Speaker, I will offer a motion to recommit H.R. 1163, and I ask
unanimous consent to add the text of this amendment into the Record
immediately prior to the vote on the motion to recommit.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Ohio?
There was no objection.
Mr. SMITH of Missouri. Mr. Speaker, I am prepared to close, and I
reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, Democrats strongly agree that those who took advantage
of the COVID crisis to commit fraud must be held accountable. That is
why Democrats put $2 billion in the American Rescue Plan Act to fight
fraud. Every House Republican voted against it.
According to the Department of Labor's trust fund, only 16 States met
the required solvency standard for unemployment systems. Instead of
punishing organized crime and instead of addressing the fragility of
State unemployment systems, the Republican H.R. 1163 guts Federal
funding to fight fraud, weakens State unemployment systems, privatizes
American public service jobs, and claws back overpayments for workers
who were unemployed during the pandemic and received overpayments
through no fault of their own.
Mr. Speaker, I am shocked that the Republican leadership is advancing
this bill that guts Federal investment in stopping unemployment fraud
the same week when one of its own is indicted for such crimes.
Mr. Speaker, I urge my colleagues to oppose this bill that punishes
America's families while stunting accountability for actual crimes.
Mr. Speaker, I urge a ``no'' vote, and I yield back the balance of my
time.

Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my
time.
The only way that this bill punishes American families are American
families who are fraudsters, American families who intentionally create
and commit fraud. Give me a break.
After years of inaction when Democrats held the majority, taxpayers
have lost anywhere from $191 billion upward to $400 billion in fraud,
and their identities have been stolen.
Democrats ignored it. They blocked it, and they shot down commonsense
safeguards. Guess what? They refused to hold even one hearing on fraud.
American workers, families, and small businesses are already dealing
with a cost-of-living crisis, and they deserve better. That is why they
elected a Republican majority on the promise of a government that is
accountable.
Today's bill delivers on that accountability with commonsense reforms
that empower the States to make things right. With this vote, we will
end the greatest theft of taxpayer dollars in American history.
Mr. Speaker, I urge my colleagues on both sides of the aisle to do
the right thing and vote in favor of this bill and against fraud.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 383, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.

Motion to Recommit

Mrs. SYKES. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:

Mrs. Sykes of Ohio moves to recommit the bill H.R. 1163 to
the Committee on Ways and Means.

The material previously referred to by Mrs. Sykes is as follows:

Mrs. Skyes moves to recommit the bill H.R. 1163 to the
Committee on Ways and Means with instructions to report the
same back to the House forthwith, with the following
amendment:
In section 2(a)(2), strike ``(f)(3)'' each place it appears
and insert ``(f)''.
In section 2(a)(2), redesignate subparagraphs (A) and (B)
as subparagraphs (D) and (E), respectively, and insert the
following:
(A) in subparagraph (2), by striking ``In'' and inserting
``Subject to paragraph (3), in'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(C) by inserting the following:
``(3) Waiver for certain individuals.--In the case of
individuals who have received amounts of Federal Pandemic
Unemployment Compensation or Mixed Earner Unemployment
Compensation under this section to which they were not
entitled, the State may not require such individuals to repay
the amounts of such pandemic unemployment assistance to the
State agency if--
``(A) the State agency determines that the payment of such
Federal Pandemic Unemployment Compensation or Mixed Earner
Unemployment Compensation was without fault on the part of
any such individual, and
``(B) such individual--
``(i) is a worker age 60 or older who is receiving benefits
under title II of the Social Security Act (42 U.S.C. 401 et
seq.);
``(ii) is a veteran, as such term is defined in section 101
of title 38, United States Code; or
``(iii) was working in health care (including as a provider
or support staff) in 2020 or 2021.'';
In section 2(a)(2)(D), as redesignated, strike
``subparagraph (A)'' and insert ``paragraph (4)(A), as
redesignated by subparagraph (B) of this paragraph,''.
In section 2(a)(2)(E), as redesignated, by inserting
``after paragraph (4)(B), as redesignated by subparagraph (B)
of this paragraph,'' after ``at the end''.
In section 2(a)(3), strike ``(e)(3)'' each place it appears
and insert ``(e)''.
In section 2(a)(3), redesignate subparagraphs (A) and (B)
as subparagraphs (D) and (E), respectively, and insert the
following:
(A) in subparagraph (2), by striking ``In'' and inserting
``Subject to paragraph (3), in'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(C) by inserting the following:
``(3) Waiver for certain individuals.--In the case of
individuals who have received amounts of Federal Pandemic
Unemployment Compensation or Mixed Earner Unemployment
Compensation under this section to which they were not
entitled, the State may not require such individuals to repay
the amounts of such pandemic unemployment assistance to the
State agency if--
``(A) the State agency determines that the payment of such
Federal Pandemic Unemployment Compensation or Mixed Earner
Unemployment Compensation was without fault on the part of
any such individual, and
``(B) such individual--
``(i) is a worker age 60 or older who is receiving benefits
under title II of the Social Security Act (42 U.S.C. 401 et
seq.);
``(ii) is a veteran, as such term is defined in section 101
of title 38, United States Code; or
``(iii) was working in health care (including as a provider
or support staff) in 2020 or 2021.'';
In section 2(a)(3)(D), as redesignated, strike
``subparagraph (A)'' and insert ``paragraph (4)(A), as
redesignated by subparagraph (B) of this paragraph,''.
In section 2(a)(3)(E), as redesignated, by inserting
``after paragraph (4)(B), as redesignated by subparagraph (B)
of this paragraph,'' after ``at the end''.
At the end of section 2(a) add the following:
(6) Waiver for certain individuals.--
(A) In general.--In the case of individuals who have
received applicable Federal unemployment payments to which
they were not entitled, the State may not require such
individuals to repay such amounts to the State agency if--
(i) the State agency determines that the payment of such
amounts was without fault on the part of any such individual,
and
(ii) such individual--

(I) is a worker age 60 or older who is receiving benefits
under title II of the Social Security Act (42 U.S.C. 401 et
seq.);
(II) is a veteran, as such term is defined in section 101
of title 38, United States Code; or
(III) was working in health care (including as a provider
or support staff) in 2020 or 2021.

(B) Applicable federal unemployment payments.--In this
paragraph, the term ``applicable Federal unemployment
payments'' means--
(i) amounts of sharable extended compensation and sharable
regular compensation from a State to which paragraph (4)
applies for weeks of unemployment described in such
paragraph; and
(ii) amounts of regular compensation from a State described
in paragraph (5) for the first week of regular unemployment
for which the State received full Federal funding under the
agreement described in such paragraph.

The SPEAKER pro tempore. Pursuant to clause 2(b) of rule XIX, the
previous question is ordered on the motion to recommit.
The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.

[[Page H2293]]

Mrs. SYKES. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question are postponed.

____________________