The House approved legislation Tuesday to double the statute of limitations for pandemic unemployment fraud to 10 years, brushing aside Democrats’ attempt to turn the bill into a referendum on Elon Musk and President Trump’s Department of Government Efficiency.
Republicans said as much as $400 billion was stolen from the unemployment funds and just $5 billion has been recovered so far. Without the extension, tens of thousands of cases will go cold starting at the end of this month.
“Criminals are going to get away scot-free unless we pass this legislation,” said Rep. Jason Smith, Missouri Republican and chief sponsor of the measure.
The statute of limitations expires on March 27, which marks five years since Congress first approved expanded unemployment benefits at the start of the pandemic shutdowns.
That leaves little more than two weeks for Capitol Hill and the president to act. Once the deadline passes, lawmakers said they cannot go back and restore it without violating the Constitution.
The government has more than 1,600 open investigations and the Labor Department’s tip line has 157,000 open tips on fraud which would go unsolved without an extension, according to Republicans.
“Don’t let the criminals and the fraudsters win,” said Rep. Darin LaHood, Illinois Republican.
The bill passed on a 295-127 vote with 83 Democrats joining Republicans in support. It now needs action in the Senate before it can reach Mr. Trump’s desk.
Unemployment was one of three major pandemic relief programs, along with two small business loan programs. The statute of limitations for fraud in those two programs has already been doubled to 10 years, making the unemployment debate stand out.
Democrats who opposed the bill Tuesday justified their vote by attacking Mr. Trump and Mr. Musk.
“This bill is just another part of the Trump-Musk fake war on waste, fraud and abuse,” said Rep. Lloyd Doggett, Texas Democrat.
He said if Mr. Trump was serious about combatting fraud, he wouldn’t have fired more than a dozen inspectors general, including the Labor Department’s watchdog who is tasked with investigating the unemployment claims.
Rep. Terri Sewell, Alabama Democrat, said she worried prosecutors would go after “innocent workers” who lost their jobs, collected unemployment and were overpaid by their states through no fault of their own.
“Sadly my Republican colleagues are using this bill to throw millions of Americans’ lives and livelihoods into instability,” she said. “This bill is not about fraud.”
Rep. Danny Davis, Illinois Democrat, said he tried to amend the bill to only allow prosecutions for fraud that topped $100,000.
Republicans said that would have let off the hook fraudsters such as Rashaad Hill, a Rhode Island man who collected $31,540 in bogus unemployment benefits and, as boasted to friends, spent it on “weed and guns.” He was slapped with a two-year prison sentence in 2023.
Then there was the immigrant from the Dominican Republic who was living under a stolen U.S. citizen’s identity and claimed $34,000 in unemployment based on that name.
A Washington Times review of nearly 1,000 pandemic fraud defendants found little evidence of prosecutions against people who were overpaid by state errors.
Roughly $675 billion was spent on emergency federal pandemic unemployment claims. The Government Accountability Office calculates that $100 billion to $135 billion of that was fraudulent, while outside estimates go as high as $400 billion.
A massive chunk went to foreign fraudsters with ties to adversary nations such as China and Russia, and to fraud rings in Romania and Nigeria.
The fraud resulted from choices Congress and the first Trump administration made, determining that it was more important to get cash out the door than to impose strict identity checks up front.
Many states that administered unemployment with additional federal money during the pandemic also had antiquated systems that made the fraud easy.
California proved to be a particularly juicy target for the scammers.
