Congress’s destructive $600 weekly unemployment bonus is boosting fraud & killing jobs

In response to the COVID-19 pandemic, Congress dramatically expanded unemployment insurance (UI) benefits through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act (FFCRA). In addition to increased benefit durations past state maximums, permitting states to suspend critical job search requirements, and benefits for previously ineligible people, a $600 weekly unemployment bonus was added onto existing benefits. To put this in perspective, this unemployment bonus is 24 times larger than the $25 weekly bonus adopted by Congress during the Great Recession in 2009.

While the bonus is set to expire in July, Democrats in Congress are trying to extend it to at least 2021, threatening the American recovery. Indeed, at least 68 percent of people receiving unemployment benefits are now paid more to remain unemployed than to return to work. The average benefit for unemployment is now nearly $1,000 per week, or the equivalent of about $50,000 annually.

State unemployment systems are now overloaded and more susceptible to fraud than perhaps ever before. The U.S. Department of Labor’s Inspector General is already estimating that waste, fraud, and abuse in the UI program is about to explode to possibly more than $26 billion for the CARES Act payments alone. Extending the UI bonus beyond its scheduled expiration in July would balloon these fraud costs even higher.