Trump’s Department of Labor claims without data that states defrauded government
Summary
The Department of Labor, led by acting Secretary Keith Sonderling, sent letters to 53 states and territories demanding action to stop fraud and misuse in unemployment insurance programs. The department threatened to cut states’ administrative funds if they do not act, but did not provide clear data to back up claims of fraud in states like California, New York, and Illinois.Key Facts
- The Department of Labor sent letters to all states and territories warning about fraud in unemployment insurance.
- They threatened to withhold funds that states use to run unemployment programs if issues are not addressed.
- The department named California, New York, and Illinois as having high fraud or improper payments without providing detailed proof.
- California owes $20 billion to the federal government from a loan given during the COVID-19 pandemic for unemployment aid.
- Improper payments, which are often due to old computer systems, are not the same as fraud. The US average improper payment rate is about 14.9%.
- Some Republican-led states like Florida report even higher improper payment rates than the states mentioned.
- Experts say states need more help from the federal government, and blame or threats may make the problem worse.
- In May 2025, the Department of Labor asked states to return unused funds from the American Rescue Plan, which critics say could disrupt efforts to improve unemployment systems.
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