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$19 Billion In Unemployment Benefits Paid In Error

Regular consumers of Democrat Party wisdom will recall their assertion that unemployment benefits are the best possible form of “stimulus.”  Here’s top Democrat economist Nancy Pelosi – who at the time was Speaker of the House but remains prominent and powerful as Minority Leader today – waxing poetic about how unemployment produces employment in July 2010:

Let me say that unemployment insurance… is one of the biggest stimuluses (sic) to our economy. Economists will tell you, this money is spent quickly. It injects demand into the economy, and it’s job creating. It creates jobs faster than almost any other initiative you can name.

Whatever you think of this crackpot reasoning, the most important feature of unemployment insurance is that it’s a big pile of money pumped into a welfare program by the federal government.  And you know what that means…

Nearly $19 billion in state unemployment benefits were paid in error during the three years that ended in June, new Labor Department data show.

The amount represents more than 10% of the $180 billion in jobless benefits paid nationwide during the period.  The tally covers state programs, which offer benefits for up to 26 weeks, from July 2008 to June 2011. Layers of federal programs that help provide benefits for up to 99 weeks weren’t included.

That’s from the Wall Street Journal, which notes this data rolled out of the Labor Department even as the Obama Administration “promotes is bid to reduce waste at federal agencies.”

Like all Obama Administration functionaries, Labor Secretary Hilda Solis spends a great deal of her time these days explaining why billions of dollars just up and disappeared.  Here’s how she addressed the missing $19 billion, which is thirty-five times the size of the taxpayer money abused in the Solyndra scandal:

“The Unemployment Insurance system is a unique partnership between the federal government and the states. States bear the responsibility of operating an efficient and effective benefits program, but as partners the federal government must be able to hold them accountable for doing so,” Labor Secretary Hilda Solis said in a release.

[…] The Labor Department noted, “it may be misleading to compare one state’s payment accuracy rates with another state’s rates… States with stringent or complex provisions tend to have higher improper payment rates than those with simpler, more straightforward provisions.”

So we all send billions of dollars to Washington (or, depending on whether you count unemployment insurance as part of our titanic deficit, Washington appropriates the money from children who can’t vote yet.)  This money is then parceled out to the states, which have a variety of methods for determining the eligibility of unemployment recipients.  The states that set more difficult standards have more errors… and, judging by the testimony of Indiana Workforce Development Commissioner Mark Everson, they still pay out benefits even if the difficult standards are not fully met:

Mr. Everson pointed out that in Indiana, benefit recipients are required to list three work searches. If a recipient fills out only two of the three searches correctly, there are cases when the recipient can still receive benefits. But that counts as an error.

(Emphasis mine.)  So, the Obama Administration’s response to losing $19 billion, as people who fail to meet complex standards nevertheless collect benefits, is to applaud the states that have simpler rules, because they can shovel out money with fewer of those pesky “errors” cropping up in the paperwork.

And Obama’s phony “jobs bill” wants to plow even more money into this system, even as the President and his economic wizards scratch their heads and wonder why paying huge unemployment benefits has failed to promote job creation!  But don’t worry, in between testifying before congressional investigators, Obama’s people will work hard to crack down on waste, fraud, and abuse.

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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