Santos Busted For Unemployment Fraud, So Republicans Aim To Cut Crackdown

The indictment comes the same week as the Republican-controlled House is scheduled to vote on H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act, of which Santos is a co-sponsor.

The bill’s Republican backers say it would “recover potentially hundreds of billions of dollars in stolen unemployment benefit” by giving incentives to states to crack down on fraud and extending the statute of limitations for prosecutions.Democrats have noted, however, that the bill would actually repeal about $2 billion previously approved for the Department of Labor “to detect and prevent fraud, promote equitable access, and ensure the timely payment of benefits with respect to unemployment compensation programs.”

In a March 28 statement opposing the bill, Rep. Richard Neal (D-MA), the ranking member of the House Ways and Means Committee, said:

This legislation slashes the fraud fund from the American Rescue Plan. It favors contractors who enabled fraud during the pandemic over the hard-working state workers who were actually on the frontlines of getting benefits out during the pandemic. The bill completely ignores the recommendations from the Republicans’ own hearing witnesses earlier this month to modernize state unemployment systems. That’s what this bill would do about fraud. Needless to say, more harm than good.

In a Tuesday blog post, the progressive nonprofit Center for Budget and Policy Priorities predicted the legislation was “more likely to hurt than help anti-fraud efforts” and noted:

In responding to the massive and unprecedented surge in UI claims in early 2020, while also attempting to implement new temporary programs to fill the huge gaps in the regular unemployment system, state UI agencies made payment errors when processing claims. Suggesting that states should undertake a decade-long effort to reclaim these amounts — rather than focus on preventing criminal rings from defrauding the system — would both unduly target individuals who did nothing wrong while also misdirecting public resources.

Democratic Rep. Don Beyer of Virginia pointed out the absurdity of the timing, tweeting: “You can’t make this up: House Republicans are beginning floor consideration *today* of a bill that would defund efforts to crack down on unemployment fraud. On the same day that one of their own members was hit with a criminal indictment for unemployment fraud.”

House Majority Leader Steve Scalise was asked on Wednesday if the indictment undermines the Republican message on unemployment benefit fraud and whether Santos should resign. After noting that his colleague is entitled to the presumption of innocence, the Louisiana Republican said: “We’re gonna continue to root out fraud, and there’s lots of it. We’re talking about tens if not hundreds of billions of dollars in fraud in many federal programs.”

Pressed again about whether the indictment undermines the party’s message, Scalise did not answer the question.