Wednesday Waste, $14B in Overpaid Unemployment Benefits?
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The federal government and states overpaid $14 billion in unemployment benefits in fiscal 2011, according to U.S. Labor Department reports. Funds meant to keep millions of unemployed workers out of poverty are being squandered. A majority of funds end up with those who are not actively seeking a job, have quit or were fired, or have returned to work but still file claims. Still others are intentionally defrauding the government for undeserved unemployment checks.
There were roughly 2,700 convictions for unemployment insurance fraud in fiscal 2011, which makes the system second only to the National School Lunch Program for the highest rate of improper payments. Vice President Joe Biden observed, “Unemployment checks are going to people in prison. Unemployment checks are going to graveyards.”
While the Labor Department is striving to collect overpayments, historically, it recovers only a quarter of the “estimated recoverable overpayments.” Essentially, the government has lost almost $14 billion that overwhelmingly does not go towards aiding the unemployed or promoting economic growth. Cutting government spending on overpayments is one way Washington can improve the economy and decrease unemployment.