NEW YORK (AP) 鈥� The latest government waste touted by billionaire Elon Musk's cost-cutting Department of Government Efficiency is hundreds of millions of dollars in fraudulent unemployment claims it purportedly uncovered.
One problem: Federal investigators already found what appears to be the same fraud, years earlier and on a far greater scale.
In , the social media site Musk owns, DOGE announced 鈥渁n initial survey of unemployment insurance claims since 2020鈥� found 24,500 people over the age of 115 had claimed $59 million in benefits; 28,000 people between the ages of 1 and 5 collected $254 million; and 9,700 people with birthdates more than 15 years in the future garnered $69 million from the government.
The tweet drew a predictable party-line reaction of either skepticism or cheers, including from Musk himself, who said he re-read it several times before it sank in.
鈥淎nother incredible discovery,鈥� , who repeated DOGE鈥檚 findings to President Donald Trump in a Cabinet meeting last week.
Chavez-DeRemer鈥檚 recounting of the alleged fraud, including claims of benefits filed by unborn children, himself.
鈥淭hose numbers are really bad,鈥� he said.
But Chavez-DeRemer needn't look further than her own department鈥檚 Office of the Inspector General to find such fraud had already been reported by the type of federal workers DOGE has demonized.
鈥淭hey鈥檙e trying to spin this narrative of, 鈥極h, government is inefficient and government is stupid and they鈥檙e catching these things that the government didn鈥檛 catch,鈥欌�� says Michele Evermore, who worked on unemployment issues at the U.S. Department of Labor during the administration of former President Joe Biden. 鈥淭hey鈥檙e finding fraud that was marked as fraud and saying they found out it was fraud.鈥�
The Social Security Act of 1935 but left it to individual states to set up systems to collect unemployment taxes, process applications and mete out support.
Though states have almost complete control over their own unemployment systems, special relief programs 鈥� most notably 鈥� inject more direct federal involvement and a flood of new beneficiaries into the system.
In regular times, state unemployment systems perform 鈥渧ery well, not so well and terribly,鈥� according to Stephen Wandner, an economist at the National Academy of Social Insurance who authored the book 鈥淯nemployment Insurance Reform: Fixing a Broken System.鈥� With COVID slamming the economy and creating a flood of new claims that states couldn鈥檛 handle, Wandner says many more were 鈥渜uite terrible.鈥�
Trump signed the COVID unemployment relief into law on March 27, 2020, and from the very start it became a magnet for fraud. In , the Department of Labor warned that the expanded benefits had made unemployment programs 鈥渁 target for fraud with significant numbers of imposter claims being filed with stolen or synthetic identities.鈥�
That same memo offered an option for states trying to protect a person whose identity was stolen to fraudulently collect unemployment benefits. To preserve a record of the fraud but keep innocent people from being linked to it, states could create a 鈥減seudo claim,鈥� the memo advises.
Those 鈥減seudo claims鈥� led to records of toddlers and centenarians getting checks. The Labor Department's inspector general from people over the age of 100 between March 2020 and April 2022, but another departmental memo explained that to protect people whose identities were used.
鈥淢any of the claims identified ... were not payments to individuals over 100 years of age, but rather 鈥榩seudo records鈥� of previously identified fraudulent claims,鈥� the 2023 memo says.
A Labor Department spokeswoman did not respond to questions about Musk's findings and DOGE gave no details on how it came to find the supposed fraud or whether it duplicates what was already found.
Though DOGE ostensibly looked at longer timeframe than federal investigators previously had, it tallied just $382 million in fake unemployment claims, a tiny fraction of what investigators were already aware.
In 2022, the Labor Department said . The Government Accountability Office later said it was far worse, .
鈥淚 don't think it's news to anyone,鈥� says Amy Traub, an expert on unemployment at the National Employment Law Project. 鈥淚t's been widely reported. There've been multiple congressional hearings.鈥�
If DOGE's newest allegations have an air of familiarity, it's because they echo its prior findings of . Those were false claims.
That makes DOGE an imperfect messenger even when fraud has occurred, as with unemployment claims.
Jessica Reidl, a senior fellow at the conservative think tank The Manhattan Institute, is a fiscal conservative who so champions rooting out federal waste she has written 600 articles on the subject. Though she believes unemployment insurance fraud is rife, she has trouble accepting any findings from DOGE, which she says has acted ineffectively and possibly illegally.
鈥淲hen DOGE says impossibly old dead people are collecting unemployment in huge numbers, I become skeptical,鈥� Reidl says. 鈥淒OGE does not have a good track record in that area.鈥�
Traub said the burst of pandemic-era unemployment fraud led states to implement new security measures. She questioned why Musk鈥檚 team was trumpeting old fraud as if it鈥檚 new.
鈥淏usiness leaders and economists are warning about a national recession, so it鈥檚 natural to think about unemployment,鈥� says Traub. 鈥淚t鈥檚 an attack on the image of a critically important program and perhaps an attempt to undermine public support on unemployment insurance when it couldn鈥檛 be more important.鈥�
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Matt Sedensky can be reached at [email protected] and https://x.com/sedensky.
Matt Sedensky, The Associated Press
