JEFF CHILDERS

Is there any government charity program that isn’t a fraudulent mess? Yesterday, the Wall Street Journal reported, “State Unemployment Programs Targeted in Federal Antifraud Campaign.” The subheadline explained, “The Trump administration sends warning to all 50 states about complying with measures to stop alleged fraud.”

image 7.png
CLIP: Acting Labor Secretary Keith Sonderling explains post-covid fraud in unemployment insurance (1:37).

“It’s one of the largest taxpayer-funded thefts in history,” Labor Secretary Sonderling said. “How did this happen? A lack of oversight and control. Paying prisoners. Paying children. States turning a blind eye.”

image 8.png
I’m not sure I see the problem. After all, prisoners are unemployed. Prisoners are fraudsters, rapists, murderers, and people who sell their SNAP benefit cards to Venezuelan drug dealers. Crime is literally their job. A job they can’t do right now, due to unfortunate circumstances beyond their control, such as being arrested by police officers. Where is the empathy from this heartless administration?

“We’re taking some extraordinary measures,” Sonderling explained, “to make sure that never happens again. If states allow fraud, they will suffer the consequences.” Beyond lax oversight, there are structural problems. Sonderling explained that under the current disjointed system, a single Social Security number can get unemployment from multiple states.

The DOL’s announcement used three states as bad examples. You could probably guess which ones. I’ll just tell you: California, Illinois, and New York. (Not exactly a plot twist.) The Government Accountability Office estimated that fraud accounted for up to 15% of the total paid out through unemployment insurance programs from April 2020 through May 2023. Meaning billions.

You won’t be surprised to learn that the federal government lavishes hundreds of billions on the states to distribute through state programs to nonworkers. You could call it a wealth transfer from the better-employed states to the poorly managed ones. Anyway, the Trump Team is now threatening to suspend or cancel transfers to states that can’t or won’t get their unemployment fraud under control.

The real question is: why did this take so long?