Secret Service Seizes Billions in Fraudulent Covid Relief Payments

Plus, Biden and GOP senators optimistic after infrastructure talks  [The Fisc](   By Yuval Rosenberg and Michael Rainey Quote of the Day: CDC Says Vaccinated Americans Can Ditch Their Masks (in Most Places) “Anyone who is fully vaccinated can participate in indoor and outdoor activities, large or small, without wearing a mask or physical distancing. If you are fully vaccinated, you can start doing the things that you had stopped doing because of the pandemic. We have all longed for this moment when we can get back to some sense of normalcy.” – Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, announcing that fully vaccinated people no longer need to wear masks or maintain social distance except under [certain circumstances]( like during travel on buses, trains, planes and public transportation. A maskless President Joe Biden, speaking from the White House Rose Garden, called it “a great day for America.” Biden, GOP Senators Optimistic After Infrastructure Talks President Joe Biden and a group of senior Republican senators continued their infrastructure talks Thursday and emerged from a White House meeting sounding optimistic that a bipartisan deal could be reached — or that, at the very least, both sides were talking in good faith. “We had a very, very good meeting,” Biden told reporters afterward. “It was great to be back with so many of the colleagues that I had served with in the Senate and I am very optimistic that we can reach a reasonable agreement. Even if we don’t it’s been a good faith effort.” Biden said he had laid out his plans and how they should be paid for and that Republicans would come back with another counteroffer. He said the two sides would talk again next week. Sen. Shelley Moore Capito (R-WV), the GOP point person in the infrastructure talks, also said the talks were productive. “We did talk specifics, and the president has asked us to come back and rework an offer so that he can then react to that and then reoffer to us,” she [said](. “We’re very encouraged, we feel very committed to the bipartisanship that we think this infrastructure package can carry forward.” Republican Sens. John Barrasso of Wyoming, Roy Blunt of Missouri, Mike Crapo of Idaho, Pat Toomey of Pennsylvania and Roger Wicker of Mississippi also attended the meeting, as did Vice President Kamala Harris, Commerce Secretary Gina Raimondo and Transportation Secretary Pete Buttigieg. The bottom line: The two sides still have serious, fundamental differences over the size, scope and pay-fors of an infrastructure plan, but the continuing talks next week could provide some indication of whether a deal can be reached. “We all know we need to move pretty quickly here,” Blunt said. Biden is looking for significant progress by Memorial Day, and he indicated in an interview with MSNBC Wednesday that, while he wants to strike a bipartisan deal on portions of his proposed spending packages, he’s also willing to move ahead without GOP support as needed. "Let's see if we can get an agreement to kickstart this,” he said, “and then fight over what's left and see if I can get it done without Republicans, if need be." Secret Service Seizes Billions in Fraudulent Covid Relief Payments The Secret Service has helped recover about $2 billion in fraudulent unemployment payments connected to Covid relief efforts, the agency [announced]( Wednesday, and the funds are being returned to state unemployment offices. “The amount of unemployment insurance benefits provided in response to the COVID-19 pandemic is unprecedented in the history of the nation’s unemployment insurance system,” Larry D. Turner, Acting Inspector General at the Department of Labor, said in a statement. “Unfortunately, the significant increase in benefits made the program a target for those seeking to defraud government programs.” Saying that the $2 billion figure is a “conservative estimate” and that investigations are ongoing, Roy Dotson, Secret Service assistant special agent in charge, told [CNBC]( that the crimes were typical of the kind of cyberfraud the agency deals with every year, though at a larger scale. Most of the fraudulent unemployment payments involved identity theft, Dotson said. The agency also said it has initiated hundreds of investigations into potential fraud in several Covid relief programs and has seized $640 billion in funds dispersed through Economic Injury Disaster Loans and the Paycheck Protection Program. The bottom line: The sheer size of the Covid relief programs, along with the unprecedented speed at which they were rolled out, made a fat target for fraudsters. A report from the Labor Department’s Inspector General in March said the programs have involved fraud worth tens of billions of dollars. Of the roughly $896 billion in unemployment program funds dispersed at that time, at least $89 billion “could be paid improperly, with a significant portion attributable to fraud.” Nearly 2 Million People Could See Unemployment Benefits Slashed Republican governors in at least 16 states have announced that they will withdraw from federal unemployment programs starting next month, potentially reducing or eliminating benefits for more than 1.9 million people. Coming on the heels of last week’s disappointing April jobs report, the rapidly expanding effort to force more people back into the labor market will fall most heavily on the 1.4 million people in those states who are receiving benefits through temporary federal programs such as Pandemic Unemployment Assistance, a group that includes the self-employed and gig workers who normally are ineligible for jobless aid, and those who have exhausted their state benefits. The other half a million or so workers will lose the $300 per week supplement paid by the federal government as Covid relief and receive only the state-level payments that were in place before the pandemic. In some states, those benefits are well below the poverty level. According to [The Washington Post]( the states that have announced that they will withdraw from the federal programs include: Alabama, Arkansas, Arizona, Georgia, Idaho, Iowa, Montana, Mississippi, Missouri, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah and Wyoming. If all states with Republican governors pull out of the federal programs, about 4.6 million people would be affected, CNN’s Tami Luhby [said]( and $29 billion in payments would be eliminated from the economy. Why has job growth disappointed? For Republicans, the lackluster jobs recovery so far is relatively straightforward: Pay people to stay home and they will do so. Accordingly, removing the federal unemployment aid will force people to take jobs, at whatever pay level is offered, thereby boosting the economic recovery. “Alabama is giving the federal government our 30-day notice that it’s time to get back to work,” Gov. Kay Ivey said this week as she announced her state’s withdrawal from the federal programs. Democrats say the picture is more complicated, and labor experts tend to agree. “The slowdown in hiring may instead reflect workers’ concern about their safety and difficulty obtaining child care, or their trouble finding suitable positions in hard-hit industries such as tourism on top of mounting frustration about wages they consider too low,” the Post’s Tony Room and Eli Rosenberg [report](. “That means the loss of unemployment benefits over the next month threatens to inflict new financial harm on those who say they’re already struggling.” Can they do that? There are questions about the legality of states withdrawing from the federal aid programs. In a [letter]( to Labor Secretary Marty Walsh Thursday, Sen. Bernie Sanders (I-VT) argued that the Labor Department is legally required to provide federal aid to all workers, regardless of what the governors do. “I am writing to remind you of your congressionally-mandated requirement to provide Pandemic Unemployment Assistance (PUA) benefits to workers ineligible for state unemployment aid and urging you to ensure workers receive these benefits even when states threaten to take it away,” Sanders said. “As Secretary, you are obligated to ensure this aid gets to workers.” More conflict ahead? Sen. Ron Wyden (D-OR) said the move by the Republican governors could just be the beginning of a broader effort to rapidly reduce Covid relief spending. “This is more of the same in terms of what we saw after the 2009 recession, when you saw states like Florida hollow out [unemployment] benefits, cutting them to the bone,” Wyden told the Post. “This is a far-right Republican governor-led strategy to rip new holes in the safety net.” Biden to Use $7.4 Billion in Rescue Funds to Hire More Public Health Workers The White House announced Thursday that it will use $7.4 billion from the $1.9 trillion American Rescue Plan enacted in March to recruit, hire and train public health workers to respond to the coronavirus pandemic and prepare for future health threats. “The funding announced today will allow the United States to expand its public health workforce, creating tens of thousands of jobs to support vaccinations, testing, contact tracing, and community outreach, and strengthen America’s future public health infrastructure,” the White House said in a fact sheet about the program. Of the total spending, $4.4 billion will be used to boost staffing at strained state and local public health departments, including funding to hire school nurses to help classrooms reopen. The other $3 billion will go toward a new grant program at the Centers for Disease Control and Prevention aimed at helping health departments hire staff, with grant recipients asked to prioritize recruiting candidates from the communities they serve and from underrepresented backgrounds. Why it matters: “The funds could give a much-needed boost to America’s crumbling public health infrastructure,” The Washington Post’s William Wan [writes](. Local public health agencies lost almost a quarter of their workers since 2008, he adds, as the CDC’s emergency preparedness budget was cut by 30% since 2003. A [report]( published earlier this month by the nonprofit, nonpartisan Trust for America’s Health said that the pandemic had highlighted the risks of chronic underfunding of the public health system: “To stand a chance against a threat like COVID-19, the nation needs to sustain higher funding year to year and invest resources in planning, workforce, and infrastructure for years beforehand. Not doing so is akin to hiring firefighters and purchasing hoses and protective equipment amid a five-alarm fire,” the report said. “While it is too soon to calculate with precision, it is likely that the United States might have averted spending much of the trillions of dollars that the COVID-19 pandemic cost if it had invested just a few billion dollars more in public health spending earlier.” Send your feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. 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