Scalise: Dem Spending Supercharging Inflation

Tuesday, June 14, 2022 Scalise: Dem Spending Supercharging Inflation

WASHINGTON, D.C. -- House Republican Whip and Ranking Member of the Select Subcommittee on the Coronavirus Crisis Steve Scalise's (R-La.) opening statement at today's Select Subcommittee's hearing calls out Democrats for turning a blind eye to pandemic unemployment insurance fraud. Whip Scalise highlights that Select Subcommittee Republicans have been calling for hearings about this issue since October 2021. Additionally, Whip Scalise calls out President Biden and Congressional Democrats for their out-of-control spending which has caused inflation to reach its highest level in 40 years.

Remarks as prepared for delivery:

"Thank you, Mr. Chairman.

"I'd like to welcome the witnesses and thank them for joining us today for this very important hearing.

"It is our job in Congress to perform oversight so this is exactly the type of hearing this Subcommittee should have. Republicans on this subcommittee wrote you on October 13, 2021, requesting this hearing so thank you, Mr. Chairman, for holding it today.

"In the initial days and months of the COVID pandemic, uncertainty was rampant and much of the economy was locked down. Congress acted multiple times in a bipartisan way to deliver relief as fast as we could to help save as many jobs as we could. We knew keeping people employed was the best way to keep our economy from crashing.

"Perhaps the most significant program was the Paycheck Protection Program or PPP. Initially, Congress gave the program $349 billion in March of 2020 and mandated that the Small Business Administration (SBA) implement the program within 15 days after enactment. Over time, the program received more than $800 billion and the SBA estimates that it saved more than 51 million jobs.

"That's right, President Trump worked with Democrats and Republicans to create and pass a program at the beginning of a global pandemic that saved more than 51 million jobs!

"Using loan data as of August 2020, the SBA Office of Inspector General has flagged an estimated $4.6 billion, or roughly half of one percent of total loan funding for potential fraud, duplicate loans, loans to businesses created after the February 14, 2020 cutoff, or loans that did not match 'Do Not Pay' data sources.

"Fraud of any amount is wrong but given the size of the program and the demands placed on the agency by Congress to rush the money out the door to save as many jobs as possible, about half of one percent is better than most federal programs that have been around for decades.

"Sadly, despite this fact, Democrats have continued their efforts to undermine the program's success by attacking the Trump Administration and financial institutions involved in the program, despite the PPP's well-documented successes.

"In stark contrast to PPP is the enhanced Unemployment Insurance (UI) program. The Labor Department's Office of the Inspector General (OIG) estimates an improper payment rate of 18.71 percent in 2021. Thus, at least $163 billion of the $872.5 billion in Federal-State unemployment benefits paid during the pandemic could have been improperly paid, with a significant portion attributable to fraud. The OIG found that, 'Based on [their] audit and investigative work, the improper payment rate for pandemic UI programs is likely higher than 18.71 percent.'

"There are numerous examples of domestic UI fraud--one man from New York received $1.5 million over ten months and a California real estate broker got more than $500,000 over six months. One person used the same Social Security number to file UI claims in 40 different states.

"In addition, the program was targeted by criminal organizations and enemy nation-states. A ProPublica investigation found that a substantial amount of UI fraud can be attributed to organized crime, both in the United States and abroad. Estimates by some say that at least 70 percent of the money stolen ultimately went to foreign nationals in China, Russia, and Nigeria. One U.S. state received fake unemployment claims that came from IP addresses in nearly 170 different countries.

"So far, just over $4 billion has been recovered. Congress has a responsibility to protect American taxpayers. We should be doing everything we can to aggressively identify, investigate, and prosecute the criminal fraud in pandemic unemployment programs. That's why I introduced a bill last week with many of my fellow Republicans to encourage states to recover fraudulent payments.

"On top of the egregious and unprecedented fraud, the pandemic's enhanced UI program has been cited as a leading contributor to the historically high inflation that is crushing American families right now. With all the legislative extensions, some claimants could receive up to 79 weeks of UI payments--about a year and half of getting paid more to stay home than go to work, all the while businesses couldn't find enough workers to fill openings.

"Democrats insisted on extending the program for another six months and providing an extra $300 a week in their partisan, $1.9 trillion spending spree that caused the highest inflation in 40 years. The latest numbers have inflation hitting 8.6 percent last month. This is costing the average American household an additional $327 per month.

"Democrats shamelessly used the pandemic to pursue their socialist dreams of government dependency. They paid people not to work, handed out big stimulus checks, and expanded government health care programs--ignoring all the warnings about the inflation it would cause. Instead of dumping cash into the already recovering economy, I wish we would have focused on reopening schools and businesses and helping workers get back to their jobs.

"While PPP and other pandemic programs have a few detractors, they were overwhelmingly bipartisan and largely succeeded in delivering much-needed relief, and saved more than 50 million jobs for hardworking families across America. I hope that in our oversight of pandemic programs today, my Democrat colleagues will be able to recognize the difference between what was needed to save the economy during an unprecedented pandemic versus pushing a partisan, inflation-inducing agenda.

"Thank you, Mr. Chairman. I yield back."