In case you had any lingering doubts that forcibly shutting down the entire economy over a virus and replacing economic activity with government payments does not represent a smart strategy, the Associated Press has more evidence to bolster the case.
Its latest investigation, titled “The Great Grift,” highlighted the staggering scope of fraud taxpayers face because of Covid-era programs. On the heels of earlier AP investigations that showed significant spending on projects that had little to do with the coronavirus, the story provides one major explanation — albeit an infuriating one — for our nearly $32 trillion-and-counting federal debt.
Hundreds of Billions in Waste
Overall, the AP analysis found that the federal government appropriated nearly $5.2 trillion on Covid-related efforts during the pandemic. That total includes roughly $3.2 trillion shelled out under President Donald Trump, in addition to the $1.9 trillion “stimulus” legislation that Democrats rammed through after President Joe Biden took office.
Other figures seem even more shocking. For starters, roughly 20 percent, or $1 trillion, of the $5.2 trillion “has yet to be paid out, according to the [Pandemic Response Accountability] Committee’s most recent accounting.” You read that right: More than three years after the coronavirus first hit — and after the Biden administration (finally) ended the public health emergency for the virus — there is still $1,000,000,000,000 in federal “Covid cash” left to be spent. (Much of the money has been contractually obligated but not yet spent, which provides an explanation — or excuse, depending upon one’s point of view — as to why Congress could not rescind the full $1 trillion in last month’s debt limit deal.)
Of the roughly $4.2 trillion spent thus far, approximately 10 percent of the sum represents fraud or waste. The AP investigation found $280 billion in stolen money, with “another $123 billion … wasted or misspent.”
To put it in perspective, this over $400 billion total represents more than 20 times what the federal government spends on cash welfare payments every year. And of course, as the AP noted, the amount of taxpayer dollars lost to fraud or waste will likely grow, both as more money gets paid out and as investigators dig into their cases.
To give some scale of the magnitude of the fraud, consider that investigators within the Small Business Administration have “a backlog of more than 80,000 actionable leads, close to 100 years’ worth of work.” If investigators have a backlog that could keep them occupied for an entire century, then what do you think the chances are that a single individual who fraudulently claimed assistance for a bogus business will get tried and brought to justice?
Independent experts think the amount of fraud could easily exceed official government estimates. The AP story noted that a 2022 study from the University of Texas counted the amount of questionable Paycheck Protection Plan loans at $117 billion, nearly six times the $20 billion total cited by the Small Business Administration’s inspector general.
Actions Insufficient to Fight Fraudsters
Both then and now, federal officials seem unable or unwilling to do enough to combat the scam artists. Michael Horowitz, who heads the pandemic oversight committee, criticized the government for not checking individuals against the Treasury’s “Do Not Pay” database before sending out funds in 2020, even though a review against this existing database would have taken minimal time: “24 hours? 48 hours? Would that really have upended the program? I don’t think it would have. And it was data sitting there. It didn’t get checked.”
Even now, investigators still face obstacles. The Labor Department’s inspector general noted a lack of cooperation from the federal Bureau of Prisons in tracking down prisoners who scammed the government for fraudulent unemployment benefits.
It is enough to make honest taxpayers feel like a bunch of suckers for funding payments to these scam artists and hucksters. That the government shut down businesses, schools, and countless other establishments in the name of fighting a virus was bad enough, particularly given the long-lasting effects of the shutdowns on our nation’s children. That Washington saw fit to give billions to scam artists, ostensibly to offset the harm of its ill-advised policies in the first place, adds insult to injury.