{"id":2227953,"date":"2024-04-23T09:07:02","date_gmt":"2024-04-23T13:07:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/california-unemployment-fund-insolvent-due-to-55b-fraud-businesses-to-pay\/"},"modified":"2024-04-23T09:13:56","modified_gmt":"2024-04-23T13:13:56","slug":"california-unemployment-fund-insolvent-due-to-55b-fraud-businesses-to-pay","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/california-unemployment-fund-insolvent-due-to-55b-fraud-businesses-to-pay\/","title":{"rendered":"California&#8217;s jobless fund &#8216;bankrupt&#8217; after $55B scam, burden on businesses"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcalifornia-unemployment-fund-insolvent-due-to-55b-fraud-businesses-to-pay%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2227953&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>California&#8217;s <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/amid-driver-shortages-ride-share-companies-hike-prices-by-40\/\" title=\"Amid Driver Shortages, Ride Share Companies Hike Prices By 40%\">unemployment insurance fund<\/a> in deep trouble with $55 billion in fraud and overpayments. The \u2063state faces a $21 billion \u2062debt to the federal government. Efforts are underway for loan forgiveness as Democrats propose <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/why-democrat-leadership-is-terrifying\/\" title=\"Why Democrat Leadership is Terrifying\">tax hikes<\/a> and benefit increases. The fund&#8217;s solvency remains a critical issue as unemployment numbers climb, posing further financial \u200cchallenges. California&#8217;s unemployment insurance fund is in dire straits due\u2064 to \u200c$55 billion in fraud and overpayments. The state is burdened\u200c with a $21\u2064 billion debt \u200bto the federal government. Loan forgiveness is \u2063being pursued, while Democrats mull over tax hikes and benefit boosts. Maintaining \u200bsolvency is crucial as rising unemployment poses financial hurdles.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>(The Center Square) \u2013 California\u2019s unemployment insurance fund is \u201cstructurally insolvent\u201d due to <strong><a href=\"https:\/\/www.auditor.ca.gov\/reports\/2022-001.1\/index.html#2022-1\">$55 billion<\/a><\/strong> in fraud and overpayment during COVID-19 crisis, leading to a growing $21 billion unemployment benefits loan from the federal government the state is unable to pay down. <\/p>\n<p>While the state seeks loan forgiveness from the Acting United States Secretary of Labor, who was California\u2019s Secretary of Labor during the COVID-19 era and oversaw the state\u2019s fraudulent payments \u2014 including nearly $1 billion to felons in prison filling out fraudulent paperwork \u2014 California Democrats have proposed quintupling unemployment insurance taxes and nearly doubling unemployment benefits. <\/p>\n<p>In 2020 California <strong><a href=\"https:\/\/edd.ca.gov\/siteassets\/files\/unemployment\/pdf\/edduiforecastjan24.pdf\">borrowed<\/a><\/strong> $17.8 billion to continue payments from its unemployment insurance fund, a number that is projected to reach $20.8 billion by the end of 2024 due to insufficient payments. With unemployment projected to grow from 804,000 Californians in 2022 to 930,000 Californians by 2025, benefits payments are projected to grow \u2014 barring any legislative changes from $5 billion in 2022 to $6.8 billion by 2025. While California\u2019s unemployment insurance fund already faced poor solvency before the COVID-19 crisis, $55 billion in fraud and overpayments have led the state\u2019s non-partisan Legislative Analyst\u2019s Office to declare the program \u201c<strong><a href=\"https:\/\/lao.ca.gov\/LAOEconTax\/article\/Detail\/779\">structurally insolvent<\/a><\/strong>.\u201d <\/p>\n<p>\u201cThe administration\u2019s UI Trust Fund forecast shows that UI <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/joe-bidens-choice-to-oversee-covid-unemployment-benefits-lost-600-million-in-coronavirus-relief-to-nigerian-scammers\/\" title=\"Joe Biden\u2019s Choice To Oversee COVID Unemployment Benefits Lost 0 Million In Coronavirus Relief To Nigerian Scammers\">benefit payments<\/a> exceeded state payroll tax contributions by $1.3 billion in 2023,\u201d <strong><a href=\"https:\/\/lao.ca.gov\/LAOEconTax\/article\/Detail\/779\">wrote<\/a><\/strong> the LAO in January. \u201cThe administration anticipates this imbalance will increase to about $1.6 billion annually in 2024 and 2025. Historically, benefit payments have only exceeded contributions during major economic downturns \u2013 most recently, during the pandemic and Great Recession.\u201d<\/p>\n<p>If a state\u2019s unemployment insurance fund owes money to the federal government for two consecutive years, federal law automatically imposes an escalating tax increase on employers to pay back the loan. This tax increase <strong><a href=\"https:\/\/edd.ca.gov\/siteassets\/files\/unemployment\/pdf\/edduiforecastjan24.pdf\">amounts<\/a><\/strong> to $21 per worker per year, meaning that in the fifth year of tax increases, the tax will have increased $105 over the baseline level. <\/p>\n<p>This $21 increase per worker per year amounts to an additional $400 million per year in increased revenue. However, these growing payments still are not enough to reduce the principal owed to the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/state-department-ices-out-military-spouses\/\" title=\"State Department Ices Out Military Spouses\">federal government due<\/a> to the fund\u2019s inability to fund existing claims, let alone <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/taliban-stopped-paying-electricity-providers-kabul-now-facing-blackout\/\" title=\"Taliban Stopped Paying Electricity Providers, Kabul Now Facing Blackout\">pay back debt<\/a>. This leaves the state with two options: debt forgiveness from the federal government, and\/or increasing unemployment taxes in excess of the automatic federal increases. <\/p>\n<p>Acting U.S. Secretary of Labor Julie Su\u2019s office <strong><a href=\"https:\/\/www.dol.gov\/sites\/dolgov\/files\/ETA\/advisories\/UIPL\/2024\/UIPL%2005-24\/UIPL%2005-24.pdf\">announced<\/a><\/strong> at the end of 2023 the potential waiving of state repayment to the federal government for ineligible benefits, with the California state auditor noting the state <strong><a href=\"https:\/\/www.auditor.ca.gov\/reports\/2022-001.1\/index.html#2022-1\">submitted<\/a><\/strong> a letter in February 2024 requesting federal approval from Su \u2014 who administered California\u2019s $55 billion paid in ineligible benefits \u2014 for debt forgiveness. <\/p>\n<p>Should federal forgiveness not go through, the state is considering quintupling unemployment taxes from 0.1% to 0.5%, and nearly doubling weekly maximum benefits from $450 to $700, which would require a \u2154 vote in each chamber of the legislature to pass. However, the author of SB 1434, State Sen. Maria Durazo, D-Los Angeles, just canceled the bill\u2019s first hearing, perhaps due to the pending decision letter from the U.S. Department of Labor. <\/p>\n<p>Durazo\u2019s office did not respond to media inquiries by the time of publication.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>California&#8217;s jobless fund faces insolvency with $55 billion fraud amid the pandemic. The state grapples with a $21 billion debt for unemployment benefits borrowed from the federal government. Loan forgiveness is being pursued from the Acting US Secretary<\/p>\n","protected":false},"author":1,"featured_media":2227954,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/03\/AP23353483331696-scaled-e1706209075456-1024x683.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-2227953","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/03\/AP23353483331696-scaled-e1706209075456-1024x683.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2227953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2227953"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2227953\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2227954"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2227953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2227953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2227953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}