Billionaire Elon Musk’s Department of Government Efficiency (DOGE) recently announced it had uncovered extensive fraudulent unemployment claims amounting to hundreds of millions of dollars, positioning this as a significant instance of government waste. However, it appears that federal investigators had already identified similar instances of fraud years earlier and on a much larger scale.
DOGE shared its findings on the social media platform X, which is owned by Musk, stating that an “initial survey of unemployment insurance claims since 2020” revealed 24,500 people aged over 115 claimed $59 million in benefits; 28,000 individuals aged between 1 and 5 received $254 million; and 9,700 people allegedly born more than 15 years in the future claimed $69 million in government funds.
Reactions to the announcement varied along party lines, with skepticism and support. Musk himself noted the numbers were surprising and said he had to review the findings multiple times for them to resonate. Labor Secretary Lori Chavez-DeRemer expressed amazement and mentioned DOGE’s findings to President Donald Trump during a Cabinet meeting, leading to laughter and a reaction from Trump who commented on the alarming nature of the numbers.
Despite Chavez-DeRemer’s remarks, her department’s Office of the Inspector General had already reported on similar fraud cases. Michele Evermore, who worked on unemployment issues during President Joe Biden’s administration, indicated that DOGE was discovering fraud that had previously been identified and acknowledged as such.
Unemployment benefits were established under the Social Security Act of 1935, allowing states to manage unemployment taxes and applications. However, special relief programs, particularly those expanded during the Trump administration at the start of the COVID-19 pandemic, increased federal involvement and beneficiary numbers. Economist Stephen Wandner remarked that state systems were overwhelmed during the pandemic, leading to increased instances of fraud.
President Trump signed COVID-related unemployment relief into law on March 27, 2020. Shortly after, the Department of Labor cautioned states about the anticipated rise in fraudulent claims under the expanded benefits. A memo provided states with guidance on managing fraudulent claims by creating “pseudo claims” to protect theft victims’ identities. These pseudo claims contributed to records showing toddlers and centenarians as recipients. The Labor Department’s inspector general found 4,895 such claims from individuals over 100 years old from March 2020 to April 2022, with additional memos explaining date changes made to protect identities.
A Labor Department spokesperson did not comment on Musk’s findings, and DOGE did not provide specifics on its methods or whether these mirrored prior findings. DOGE reported $382 million in fraudulent claims, a small portion of what investigators had previously documented. In 2022, the Labor Department estimated suspected COVID-era unemployment fraud exceeded $45 billion, while the Government Accountability Office suggested figures between $100 billion and $135 billion.
Amy Traub from the National Employment Law Project noted that these issues have been extensively reported in the past. DOGE’s work echoes its earlier findings concerning false Social Security claims, an area where it was found to be unreliable. Jessica Reidl of The Manhattan Institute, a fiscal conservative, expressed skepticism about DOGE’s findings, citing its ineffective and potentially illegal activities.
Traub mentioned that the pandemic fraud prompted states to improve security measures and questioned why Musk’s team was presenting old fraud discoveries as new. She suggested the emphasis on unemployment figures could be an attempt to undermine public confidence in unemployment insurance during economically uncertain times.
