Senators want to finance infrastructure with federal unemployment benefits
- President Joe Biden on Thursday supported a bipartisan infrastructure package.
- But this package does not contain funding from tax hikes, as he originally proposed.
- It would be partially paid by targeting unemployment fraud and unused federal unemployment funds.
President Joe Biden has backed a $ 1,000 billion bipartisan infrastructure deal focused on roads and bridges – and some of the spending would potentially be offset by unused relief funds and targeting fraud fraud. unemployment insurance.
Reallocated federal unemployment insurance will account for $ 25 billion of the deal’s payments, a person familiar with the details of the plan told Insider. The bulk of the funding for UI will come in the form of “the integrity of the UI program,” which will provide $ 80 billion in revenue.
“It’s fraud. It’s unemployment insurance fraud,” Senator Jeanne Shaheen (DN.H.) told Insider when asked about including UI in funding. She added: “Apparently there are several reports that speak of significant user interface fraud.”
Sen. Joe Manchin, a key moderate, said the deal would not detract from the improved user interface. “There is an awful lot of user interface frauds that can be reused,” Manchin told Insider.
Previously, Senator Shelley Moore Capito – a major GOP player and negotiator – had launched the reallocation of state unemployment funds ending federal benefits early earlier to pay for an infrastructure package. It seems to have caught the attention of lawmakers.
Andrew Stettner, senior researcher and unemployment expert at the left-wing Century Foundation, warned legislative details still need to be worked out. He also said there is a risk that people will lose the unemployment assistance to which they are entitled if fraud prevention policies are poorly implemented.
“There has certainly been an increase in organized crime activity in the unemployment insurance system which has led to a lot of frauds,” Stettner told Insider. “What should be of concern to us: the mechanisms put in place to try to prevent this fraud? Does this lead to injustice in the system? Are people wrongly involved in fraud? We’ve had a lot of cases with that. “
At least 26 states are prematurely cutting federal unemployment benefits this summer.
Many states that opt out terminate all federal benefits, including programs with expanded eligibility. This means that thousands of workers will lose – or have already lost – all benefits altogether. So far, a dozen states have ended their benefits, cutting between 400,000 and 500,000 people.
Now lawmakers are proposing that these cut benefits be used to fund new infrastructure spending, rather than tax hikes on America’s richest and its big corporations.
Overall, about 4 million Americans will see their benefits end sooner than expected. Federal programs are slated to end nationally in September, but several governors have chosen to cut their benefits in an effort to get workers back into the workforce – though the current labor shortage may also be due to lack of childcare or a mismatch between the roles and qualifications of the unemployed. As Insider’s Ayelet Sheffey reported, job searches were actually down in states ending these benefits earlier.
“It’s not because the government – because the world – is suffering that people don’t go back to their jobs,” Keshya Dempsey told Insider of the decision to end benefits prematurely, which will also cut it. Dempsey, 35, lives in Florida, where the additional $ 300 in weekly benefits will end on Saturday. “It’s political. It’s always been political.”