The new figure comes from a report released Tuesday by the Government Accountability Office (GAO). The finding is a rebuke to the Biden Administration, which had previously put the fraud total as low as $45 billion based on surveys of state programs. Congressional Republicans suspected the estimates were low and asked GAO to conduct its own study.
The agency reached its estimate by assessing a sample of more than 2,500 unemployment insurance payments issued from 2020 to 2023. The Labor Department’s previous tally relied largely on adding confirmed fraud cases reported by states, but GAO auditors say that produced a massive undercount. The oversight agency assumed a higher, more plausible fraud rate by comparing unemployment insurance to similar federal programs.
The $135 billion finding places the pandemic unemployment program in a new tier of government disaster. Fraud claimed 11% to 15% of the nearly $900 billion that Washington paid out over three years. The theft rate is another demerit for a program that caused incredible harm even when it worked as planned. Federal and state governments provided an incentive for millions of people not to work with a $600 weekly jobless bonus in 2020 and up to 79 weeks of total unemployment benefits.