(NewsBreakDaily.org) – The Coronavirus Aid, Relief, and Economic Security (CARES) Act is the most massive stimulus package in American history at $2.2 trillion. It’s also resulted in incredible waste and fraud. A new study found that $26 billion from the package has been lost due to improper spending.
To put that into some perspective, our entire unemployment system in 2019 paid out around $26 billion, according to the Labor Department and the Foundation for Government Accountability.
Fox Business reported the amount of potential fraud with the CARES Act is 10 times higher than what the entire national system sees in a full year. The abuse includes over-payments and sending money to the wrong people.
This is just the latest clue that the federal government can’t do much without screwing it up and wasting taxpayer money.
The Labor Department says unemployment fraud includes intentionally not reporting wages, knowingly falsifying information, being unavailable to work, and continuing to collect benefits when ineligible. There were also many stimulus checks sent to dead people to the tune of $1.4 billion.
The fraud related to the CARES Act happened because the government had trouble managing the program. On top of that, states had a huge backlog, there weren’t any safeguards put into place, and there was a major incentive to perpetuate abuse.
Last week, more than 1.4 million people filed for unemployment benefits. Since March, more than 52 Americans have filed claims. Of those receiving the $600 per week federal benefit (in addition to state payments averaging around $1,000), nearly 70% of them are earning more being unemployed than they would if they went back to work.
One of the major problems is there’s very little oversight in these programs, and it’s a complicated process to report fraud. And, that’s not all. Some states also have a ridiculous provision saying taking away benefits could be considered “shocking to the conscious.” Because of that, people are allowed to keep the money.
All of this fraud has real-life consequences. States are now facing an average 20% reduction in general revenues. That’s to say nothing about the national debt, which is expected to be $3.7 trillion this year.
The CARES Act was a well-intentioned program, but it had negative — and foreseeable — results. Congress had to act quickly because the economy was teetering, and people were really hurting. However, by not putting in safeguards against fraud and abuse, they wasted over $26 billion.
It’s just about a guarantee that some people will exploit government-designed spending programs. You also have to factor in the cost of incompetence.
Congress is currently considering an extension to the CARES Act, but if they don’t reach an agreement, benefits will expire this Sunday.
Overall, the stimulus package lost a ton of money. Imagine what that $26 billion could do and how many people it could help if we actually had a competent federal government.
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