Labor Department Recouping Billions in Unused COVID-19 Unemployment Funds

WASHINGTON – The U.S. Department of Labor announced Monday that $1.4 billion in unused COVID-19 relief funds has been returned to the Treasury‘s General Fund. Labor Secretary Lori Chavez-DeRemer stated that efforts are ongoing to recover an additional $2.9 billion, funds initially earmarked for unemployment insurance during the pandemic.

Chavez-DeRemer’s announcement comes as a response to a 2023 audit revealing that multiple states continued to spend federal funds despite being ineligible. The total misuse of taxpayer money, according to federal officials, reached approximately $4.3 billion.

“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars. I’m keeping my promise to be a good steward of your money by rooting out waste to ensure American workers always come first,” said Chavez-DeRemer.

Deputy Secretary of Labor Keith Sonderling echoed those sentiments, stating, “It’s unacceptable that billions of dollars went unchecked in a program that ended several years ago. In a huge win for the American taxpayer, we’ve clawed back these unused funds and will keep working to eliminate waste, fraud, and abuse.”

The funds originated from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, designed to offer enhanced unemployment assistance amid economic downturns. The Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week program was part of this initiative.

Chavez-DeRemer revealed that while the program closed in 2021, the audit indicated that four states had overspent by over $100 million despite not meeting necessary qualifications for fund access. This included states like Delaware and Louisiana that continued to utilize resources incorrectly.

Adding to the Department’s initiatives, Chavez-DeRemer announced a collaboration with Elon Musk’s Department of Government Efficiency (DOGE) to cancel more than $500 million in grants deemed unnecessary, including contributions for “gender equity in the Mexican workplace” and other overseas projects.

“It’s not an April Fools’ joke,” read a post from the Department of Labor’s X account. “But under the leadership of @SecretaryLCD and @Sonderling47, we’re reinvesting this money into the American workforce.”

As scrutiny surrounding government spending continues, Senators Rick Scott of Florida and Roger Marshall of Kansas have introduced legislation aimed at requiring the Treasury Department to track all payments accurately, following claims that $4.7 trillion in payments lacked sufficient oversight.

Chavez-DeRemer concluded, “There’s no reason leftover COVID unemployment funds should still be collecting dust. I promised to look out for Americans’ hard-earned tax dollars, and we are delivering at the Department of Labor.”