- A bipartisan Senate gang dropped a $50 billion measure to generate money from slashing fraud in unemployment.
- Experts had raised concerns that jobless people would be booted from safety net programs as a result.
- One says paying for infrastructure by repurposing unemployment aid is “funny money” that can’t be done.
- See more stories on Insider’s business page.
Unemployed Americans notched a major last-minute win in President Joe Biden’s $1 trillion infrastructure bill.
During the tumultuous negotiations, a bipartisan gang of 10 Senate Democrats and Republicans had initially eyed netting $50 billion in revenue from shoring up the “integrity” of unemployment insurance and cutting down on fraud.
Some experts and advocates raised doubts that fraud even cost that much – and that fraud measures could worsen the lives of jobless Americans already struggling with ailing UI systems. But that provision is no longer in the bill that was released on Sunday evening after weeks of discussions, possibly due to a budgetary snag.
“At the end, there’s a lot of back and forth on what would be in and what would be out,” Sen. Lisa Murkowski of Alaska, one of the GOP negotiators, told Insider. “That’s one of the things that, as they say, was left on the cutting room floor.”
Sen. Mark Warner of Virginia, a Democratic negotiator, said it was omitted because it seemed likely that it wouldn’t show up as a major source of federal funding in a budget score from the nonpartisan Congressional Budget Office, particularly if states kept the money. Republicans want the bill to be fully paid for and not grow the deficit.
“There was some scoring problem if you have a kind of incentive for the state to be able to keep some,” he told Insider.
Some experts argued as much.
“I wouldn’t be surprised if they went to CBO, and CBO said the provision was actually going to cost money or raise them close to nothing,” Marc Goldwein, head of policy at the nonpartisan Committee for a Responsible Federal Budget, told Insider.
“I was a little skeptical that putting more money into that would lead to additional savings,” Andrew Stettner, an unemployment expert at the left-leaning Century Foundation, said in an interview, referring to stepping up program integrity measures.
Experts argue that the pay-fors centered on UI wouldn’t even be possible, or raise anywhere close to the money that senators claimed. For his part, Goldwein called it “gibberish,” and said that the proposal to pay for parts of the package with repurposed unemployment insurance was “complete funny money, and it’s totally made up.”
For the bill, lawmakers are attempting to reappropriate $53 billion from states that ended their enhanced unemployment insurance programs this summer. Still, the experts said that federal money can’t be pulled from one bucket and put into another for something else.
“There’s nothing they’re doing in this action that’s reducing the deficit in any way by using this money for the infrastructure bill,” Stettner said. “It’s $53 billion that’s not going to be spent.”
Some unemployed Americans who lost their benefits prematurely told Insider that the proposed repurposing particularly stings, since it’s aid money that could have kept them afloat while cases from the Delta variant surge.
“We were basically thrown under the bus,” Natasha Binggeli, an unemployed worker in South Carolina, wrote in a message to Insider.
She added: “It feels like a knife through the heart from all political parties.”