U.S. Senators Bill Cassidy (R-LA), Susan Collins (R-ME), and Mike Crapo (R-ID) have criticized the Biden administration over its handling of unemployment insurance (UI) payments during the pandemic, pointing to at least $191 billion in losses due to improper or fraudulent claims. The senators highlighted that these losses included payments that went to transnational fraud rings, terrorist organizations, and other criminal groups.
“Instead of responsibly disbursing federal funds, the Biden administration’s Department of Labor opted to prioritize equity initiatives within UI, not detecting evolving fraud schemes,” wrote the senators. “The Department’s outdated technology systems, poor identity verification, and confusing and burdensome guidance hampered states from separating good-faith claimants from fraudsters.”
“It is critical that the Department move away from these misguided priorities and act expeditiously to prepare against future fraud schemes,” continued the senators. “The UI system must work for American taxpayers, not criminal actors using false identities.”
During the pandemic, state UI offices faced a sharp increase in claims combined with enhanced federal subsidies. In 2021, the Department of Labor awarded more than $780 million in grants from the American Rescue Plan Act (ARPA) to all U.S. states and territories. Section 9032 of ARPA authorized up to $2 billion for unemployment insurance program improvements but was later reduced to $1 billion by the Fiscal Responsibility Act of 2023. Despite this funding aimed at preventing fraud and promoting equitable access, performance in state UI offices did not show significant improvement.
In fiscal year 2023 alone, about 32 percent ($48 billion) of UI payments were found to be improper. The Government Accountability Office has kept the UI system on its High-Risk List since June 2022 because of ongoing issues with outdated technology and weak identity verification processes.
On May 22, the Department of Labor announced it would end all ARPA-funded UI grants as part of a review process and said it may consider new funding opportunities after completing its review. The senators called for a comprehensive assessment by the Department to evaluate current strengths and weaknesses in state UI systems.
The letter also asks for details on how ARPA grant funds were used, especially those designated as 'equity grants,' as well as information on any remaining unobligated funds under Section 9032.
The senators requested responses from the Department by September 25, 2025.
