President Donald Trump’s administration is threatening to withdraw federal funding for unemployment assistance in all 50 states, according to reports. This is part of Trump’s nationwide campaign against “fraud” in government spending.
In a letter to the governors of 53 states and territories, acting Labor Secretary Keith Sonderling warned that the federal government would use “every available tool” to combat “waste, fraud and abuse” within state-run unemployment insurance programs, including “withholding administrative funds from states” for the first time in history.
“We are officially putting governors on notice,” Sonderling said. “The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars – no state should allow it either. If states allow it, they will suffer the consequences. This department is no longer afraid to use every lever available to ensure taxpayer money is protected.”
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While the agency did not provide data on the alleged fraud in unemployment systems, it highlighted three Democrat-led states – California, New York and Illinois – and made claims about each.
While there is no single national program for unemployment support, the federal government partners with state agencies to support temporary financial assistance to out-of-work Americans. Nearly two million people are currently receiving those benefits, while roughly 229,000 people are filing initial jobless claims every week, according to the Labor Department. However, most Americans face bureaucratic hurdles while accessing these benefits.
Most states provide roughly six months of payments to qualified Americans. Those programs are typically covered by individual states through state unemployment taxes paid by employers, but the federal government provides support for administrative costs. Cutting off the funding could potentially force state-run systems to shut down.
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Trump has appointed Vice President JD Vance to lead an anti-fraud taskforce. While this taskforce had been ostensibly created to root out fraud, it has been accused of being part of a politically-charged push against Democrat-run states.
Advocacy groups and members of Congress have accused the Trump administration of disguising Republicans’ long-running campaign to slash social services in the name of “anti-fraud” enforcement.
In his letter to states, Sonderling said the consequences of alleged fraud during the pandemic “are still playing out,” referring to the COVID-19 pandemic. The Trump administration has singled out alleged unemployment fraud in the aftermath of the pandemic, when millions of Americans had to rely on government aid. The unemployment rate peaked at a historic high of 14.8 percent in April 2020.