Top Republican: Biden engaging in 'cover-up' of massive pandemic relief fraud

"Right now our Democrat colleagues are continuing to turn a blind eye to what's possibly the greatest theft of American taxpayer dollars in American history," said Rep. Kevin Brady.

Updated: February 22, 2022 - 10:50pm

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Rep. Kevin Brady (R-Texas), ranking member of the House Ways and Means Committee, accused Democrats and the Biden administration of attempting to cover up massive pandemic relief fraud.

"Right now our Democrat colleagues are continuing to turn a blind eye to what's possibly the greatest theft of American taxpayer dollars in American history," Brady said on Tuesday during a briefing on the estimated $80 billion of pandemic unemployment payment fraud.

"Faced with billions of dollars lost to unchecked unemployment fraud involving organized cybercrime and international crime rings, Democrats have ignored repeated calls for congressional oversight hearings," he added.

Stimulus funding was needed in the early days of the pandemic when the economy shut down, but the continuation of most relief programs into late 2021 led to increased fraudulent activity, Brady argued.

"It was necessary to help the jobless, but these programs lingered and became one of the most flawed and wasteful recovery efforts ever enacted by the federal government," said the Texas Republican. "In fact, total state and federal spending on enhanced pandemic unemployment benefits exceeded $850 billion in less than two years. These programs have stunted our economic growth and worsened the labor shortage, resulting in the highest inflation in 40 years."

Brady noted that lawmakers still "don't know how much of the taxpayers' dime has been lost to fraud." 

"At the low end, the White House estimates nearly $80 billion has been lost to fraud last year, but outside experts put that number much higher, estimating that criminal fraudsters have stolen $400 billion from American taxpayers — that's half of all the COVID unemployment aid," he said. "And put another way, $400 billion is more than the entire 2021 budgets of the Army and the Navy combined. And yet Democrats have the nerve to say that Americans need to pay more in taxes."

The unprecedented level of stolen pandemic relief has led to increased identify theft victims, Brady said.

"Last year, when congressional Democrats rammed through the partisan $1.9 trillion so-called COVID stimulus, which drove inflation, by the way, in a major way, our colleagues rejected numerous Republican amendments that would have targeted relief and prevented fraud," Brady said.

"Now, the Biden administration has taken unilateral action to sweep suspected fraud under the rug, allowing states to waive large numbers of suspicious claims and forego recovery and restitution for taxpayers," he added. "This is a cover-up from the Biden administration on an issue that has cost American taxpayers hundreds of billions of dollars. Enough is enough, it's time for Congress to go after fraudsters and recover the dollars that have been lost."

Republicans on the House Ways and Means Committee have introduced the Combating COVID Unemployment Fraud Act.

According to Brady, the bill focuses on "preventing fraud on the front end, supporting the clawback of privately paid dollars and providing relief to victims of unemployment fraud and identity theft."

Brady argued that the bill would end the "pay and chase models" of public benefits by "emphasizing identity verification, and putting in place digital identity proofing services before we give out the benefits."

Brady warned that the Democrats' "dysfunctional IRS" is not prepared to help Americans who may only have just learned they are fraud victims.

"I worry economic growth has peaked for this presidency, and we are entering a wage price spiral that will drive inflation higher and longer for Americans," he said. "There is simply too much at stake not to act."

Under the CARES Act, Congress allowed self-employed individuals to apply for unemployment benefits for the first time, which experts say opened the floodgates for fraudulent claims. The supplemental federal unemployment bonus payments were continued through late 2021 under President Biden's $1.9 trillion American Rescue Plan Act.

Indiana Republican Rep. Jackie Walorski said the White House has estimated about 19% of all pandemic unemployment claims were improperly paid out.

"And that's only a partial estimate," she said. "The truth is we don't know the size and scope of unemployment fraud or the full extent of federal law enforcement officers' efforts to prosecute and recover funds. Democrats simply aren't interested in fulfilling their responsibility to investigate the funds and in the federal programs."

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