News of the Day

Watchdog: U.S. may have Misspent $191 Billion in Pandemic Unemployment Benefits

DOL Inspector General Larry Turner said in testimony submitted Wednesday to the House Ways and Means Committee that “at least $191 billion in pandemic UI payments could have been improper payments, with a significant portion attributable to fraud.”

That figure is nearly $30 billion higher than the $163 billion estimate Turner gave in testimony last year to the Democratic-controlled Senate Homeland Security and Governmental Affairs Committee.

The Ways and Means panel, chaired by Republican Rep. Jason Smith (Mo.), is meeting Wednesday for a hearing on what Smith has called “the greatest theft of taxpayer dollars in American history, the massive fraud perpetrated in the unemployment insurance program that skyrocketed with the COVID-19 pandemic.”

“With these varying estimates, it’s clear that the Biden Administration and Congress are in the dark about the size and scope of the greatest theft of taxpayer dollars in American history. The new Republican majority is turning on the lights,” Smith said.

The government created four new unemployment programs as the COVID-19 pandemic hit the country in an effort to help impacted workers, according to the Government Accountability Office (GAO), and the quick dispersal of funds opened up the programs to exploitation.

Citing DOL statistics, GAO puts the amount the federal government paid out in unemployment insurance benefits at around $878 billion between April 2020 and September 2022.

GAO said in a report last month “substantial levels of fraud and potential fraud in unemployment insurance (UI) programs during the pandemic.” Though it clarified that no measure “completely and reliably indicates the extent of fraud in UI programs,” GAO estimated that fraud specifically may have exceeded $60 billion.

“Strengthening the UI program to prevent fraud before it occurs and to detect it when it does are key objectives to ensure that unemployed workers expeditiously receive much needed benefits while safeguarding tax dollars directed toward that goal,” Turner wrote.

Governor Evers Unveils Plan to Fund Local Governments with Sales Tax

Governor Tony Evers on Tuesday proposed that counties and more than two dozen large cities in Wisconsin be allowed to ask voters to raise the sales tax to pay for local services such as police and fire protection and road repairs.

He first unveiled a proposal to change how local governments are funded in his State of the State speech last month. Evers announced the local option sales tax part of the plan on Tuesday, a week before he submits his two-year budget proposal to the Legislature.

The Governor, wants to fund local governments with 20% of the state sales tax, or 1 cent of the 5-cent sales tax charged per dollar spent. That amounts to about $576 million in the first year, with future payments increasing as the sales tax goes up, Evers said. Evers’ plan is similar to one that Republican legislative leaders have been discussing.

Assembly Speaker Robin Vos said in a statement that Republicans “will not grow the size of government or write blank checks without insisting that local governments innovate and combine services to reduce costs.”

All Wisconsin counties are now able to only levy a half-cent sales tax.

Evers’ proposal would allow for Milwaukee County to impose an additional 1 cent per dollar tax on sales, with half of what is raised going to the city of Milwaukee, if approved by voters. All other counties could ask for a half-cent sales tax increase.

Cities other than Milwaukee with at least 30,000 people could also ask voters for a half-cent sales tax increase. There are 25 cities with at least 30,000 people, based on the 2020 Census.

Just a Quarter of Hospitals Fully Compliant with Price Transparency Rule

A new report found that just about 25 percent of hospitals are fully compliant with a federal price transparency rule that requires all hospitals to post their prices online in an accessible and searchable format.

The report, published by the Patient Rights Advocate on Monday, said that it surveyed the websites of 2,000 large hospitals across the United States to determine whether they were compliant with the federal Hospital Transparency Rule that was implemented at the start of 2021. The report said that about 75 percent were not compliant with the new rule, and even though the majority posted files, “the widescale noncompliance” was “due to most hospitals’ files being incomplete, illegible, or not having prices clearly associated with both payer and plan.”

The report also found that 6 percent of hospitals had not posted any standard charges files and therefore were in total noncompliance.

“This noncompliance obstructs the ability of patients, employer and union purchasers, and technology developers to comparatively analyze prices, make informed decisions, and have evidence to remedy errors, overcharges and fraud,” the report reads.

The report also said that none of the hospitals from the country’s largest hospital system, HCA Healthcare, were in compliance.

“This blatant obfuscation of prices and flouting of the rule demonstrates that implementation and enforcement efforts must be rigorously examined and markedly strengthened to improve compliance, enable technology innovators to parse the pricing data, and empower American consumers with upfront prices,” the report reads.

The report did show an increase of compliant hospitals from previous reports released by the Patient Rights Advocate. In August 2022, just 16 percent of hospitals were compliant with the new rules, according to the report.

Department of Labor Launches Efforts to Alert Employers of New Workplace Protections for Nursing Mothers

The newly enacted Providing Urgent Maternal Protections for Nursing Mothers Act extends the rights of nursing mothers to have time and a private space to pump breastmilk at work. Under the PUMP Act, more workers in more industries are now protected by the provisions of the Fair Labor Standards Act. The new protections also expand remedies available to these workers if their employers do not comply with the law.

The campaign by the department’s Wage and Hour Division – which enforces the PUMP Act and the FLSA – provides information about worker protections for nursing mothers includes national outreach and a website providing guidance, fact sheets and other resources for workers and employers.

The PUMP Act includes the following provisions:

  • Extends rights and protections to have break time and space to pump breast milk at work to include millions of working women not previously covered by the FLSA.
  • Allows working women to take legal action and seek monetary remedies if their employer fails to comply with federal law.
  • Clarifies when an employer must pay the worker for time spent pumping breast milk if they are not completely relieved of work duties.

U.S. Job Growth Unexpectedly Surges in January

Employers added 517,000 jobs in January, the Labor Department said in its monthly payroll report released Friday. The unemployment rate, meanwhile, unexpectedly dropped to 3.4%, the lowest level since 1969.

Job gains were broad-based in January, with leisure and hospitality leading the way in hiring, adding 128,000 new workers. That was followed by employment in professional and business services (82,000), government (74,000), health care (58,000) and retail (30,000).

“The surprisingly, strong across-the-board January employment report shows that labor demand remains too hot for the economy’s own good and will embolden the Fed to raise rates more not less,” said Kathy Bostjancic, the chief economist at Nationwide. “The risks are now that they might need to do more.”

While monthly jobs data is always important, the Fed has been closely watching the reports for signs the labor market is moderating from its frenzied pace as policymakers try to wrestle inflation –  which is still running near a 40-year high – back to 2%.

Federal Reserve Bank Lifts Interest Rate by Quarter-Point and Signals more Hikes Ahead

The Federal Reserve extended its fight against high inflation Wednesday by raising its key interest rate by a quarter-point, its eighth hike since March. And the Fed signaled that even though inflation is easing, it remains high enough to require further rate hikes.

The central bank’s latest move put its benchmark short-term rate in a range of 4.5% to 4.75%, its highest level in about 15 years. Though smaller than its previous hike — and even larger rate increases before that — the latest move will likely further raise the costs of many consumer and business loans and the risk of a recession.

In a statement, Fed officials repeated language they have used since March that says, “ongoing increases in the (interest rate) target range will be appropriate.” That is seen as a signal that they intend to raise their benchmark rate again when they next meet in March and perhaps in May as well.

Over the past several months, the Fed’s officials have reduced the size of their rate increases, from four unusually large three-quarter-point hikes in a row last year to a half-point increase in December to Wednesday’s quarter-point hike.

The more gradual pace is intended to help the Fed navigate what will be a high-risk series of decisions this year. The slowdown in inflation suggests that its rate hikes have started to achieve their goal. But measures of inflation are still far above the central bank’s 2% target. The risk is that with some sectors of the economy weakening, ever-higher borrowing costs could tip the economy into a recession later this year.

State Senator says Federal Broadband Funding Offers Chance for Bipartisanship

The chair of the state Senate Utilities and Technology Committee says the unprecedented level of broadband funding coming to Wisconsin presents a chance for bipartisanship.

Speaking Friday at a conference in Brookfield hosted by the Wireless Internet Service Providers Association, Sen. Julian Bradley noted the state could see as much as $1.2 billion for broadband from one element of the Infrastructure Investment and Jobs Act. The federal law’s Broadband Equity, Access and Deployment Program provides more than $42 billion nationwide for projects aimed at expanding high-speed internet access.

“So there’s a significant amount of money that’s going to be coming in,” the Franklin Republican said. “How that’s going to be spent? Where that’s going to be spent? There’s a lot of questions about that and divided government certainly poses an opportunity for both parties to come together.”

He added broadband access is important for every Senate and Assembly district in the state, and said he and his Dem colleagues in the GOP-dominated Legislature have a solid working relationship with open lines of communication.

But he acknowledged the challenge that some legislators “may have very different ideas” about how federal funding should be used than Dem. Gov Tony Evers. He urged attendees to advocate with their representatives in the Legislature, the state Public Service Commission, the Wisconsin Broadband Office and the governor’s office.

“If we get enough money to cover almost everything, then the question isn’t which projects, it’s what order?” he said. “When do we get to those people? And that’s the next question that needs to be answered.”

Bradley argued broadband funding should be prioritized for rural areas with few to no options, rather than “completely upgrading” infrastructure for areas that are already connected.

“The focus should be, and hopefully will continue to be, on getting to rural customers … It is just absolutely critical and crucial that we get our rural folks connected to the internet so they don’t fall too far behind,” he said, pointing to the state’s western and northern regions in particular.

When asked about adding a state requirement for matching funds for broadband projects, Bradley said he liked the idea of communities having “skin in the game” with investment from all parties. But he emphasized the importance of flexibility in funding allocation, and said the PSC should be trusted as an expert steward.

He explained the state’s broadband grant program doesn’t spell out a specific requirement for matching funds. While projects that do include such funding are weighed more heavily in a scoring framework, he said, those that don’t aren’t automatically disqualified.

“With the amount of money that’s coming in … we are going to get close to full connectivity — as close as we can imagine, anyway,” he said. “And the people that we don’t hit, the few that we miss, are going to be special on-off projects that we’re going to need that additional flexibility.”

 

Biden Administration Plans to End COVID Public Health Emergency in May

The Biden administration on Monday announced that the COVID-19 public health emergency, which has been in place since January 2020, is set to end on May 11.

“The COVID-19 national emergency and public health emergency (PHE) were declared by the Trump Administration in 2020.  They are currently set to expire on March 1 and April 11, respectively.  At present, the Administration’s plan is to extend the emergency declarations to May 11, and then end both emergencies on that date,” the Office of Management and Budget (OMB) said in a statement.

“To be clear, continuation of these emergency declarations until May 11 does not impose any restriction at all on individual conduct with regard to COVID-19,” the OMB said in its statement. “They do not impose mask mandates or vaccine mandates.  They do not restrict school or business operations.  They do not require the use of any medicines or tests in response to cases of COVID-19.”

Under the flexibilities that were enacted under the PHE, traditional Medicare and Medicare Advantage beneficiaries were able to receive free at-home COVID-19 testing and treatments and pay no cost-sharing.

Private insurance providers were also required to cover coronavirus testing and services with no cost-sharing and without prior authorization.

The end of the PHE will also mean the end of Title 42 border policy, which allows border officials to expel foreign nationals and ignore asylum claims for the sake of public health protections.

Lowe’s Pioneers System to Solve Organized Retail Crime

Lowe’s Companies Inc. has innovated – and successfully tested – a new system geared toward tackling organized retail crime in a frictionless and almost invisible manner.

It’s called Project Unlock, and it’s a proof-of-concept system that underscores how there are methods to solving this industry-wide problem without having to lock up every product on the shelf, Lowe’s Chief Digital and Information Officer Seemantini Godbole said.

Lowe’s demonstrated Project Unlock last week during NRF’s 2023 expo in New York City, hosted in conjunction with the Loss Prevention Research Council. Its goal is to prove that technology can be leveraged to solve organized retail crime without hindering the shopping experience for law-abiding citizens.

Over the last 12 to 18 months, Lowe’s Innovation Labs has been testing out the system which utilizes RFID [Radio Frequency Identity] chips, scanners and blockchain.

If implemented, it would render a stolen tool inoperable which would discourage bad actors and in turn, keep employees safe, according to Godbole.

To work, manufacturers would first have to embed a wireless RFID (Radio Frequency Identity) chip into a power tool product. The chip is already preloaded with the item’s serial number. It is also embedded in the box’s barcode.

The product is set to inoperable up until the moment the customer pays for it. An RFID scanner at the register would then read the chip and activate the tool for use.

“Only products that are legitimately purchased are activated,” according to Lowe’s Innovation Labs. “If a power tool is stolen, it won’t work, which makes it less valuable to steal.”

If implemented, the idea is that word will spread “pretty quickly that stealing these tools this way is not worth it because it’ll never work,” Godbole said.

Wisconsin’s Projected Budget Surplus Grows to $7.1 Billion

New estimates from the nonpartisan Legislative Fiscal Bureau released Wednesday show the state ending the current fiscal year with a $7.1 billion surplus — $524 million more than Democratic Gov. Tony Evers’ administration projected in November.

The LFB analysis cited several factors that contributed to the $524 million difference, the most significant of which is the state’s projected Medicaid fund surplus. Due in large part to the continuation of enhanced federal matching funds enacted during the COVID-19 pandemic, the state’s Medicaid fund is projected to end the fiscal year with a $774.8 million surplus — $269.9 million more than the Evers administration expected in November.

Additionally, the 2021-23 state budget included $202.4 million to offset the repeal of the state’s personal property tax, which was to be done in separate legislation. Because the tax was never eliminated, that money will return to the state’s general fund.

Other factors include a $60.7 million increase in projected tax collections compared to the November report. Although tax collections are expected to be up in the current fiscal year, they are projected to be $74.7 million lower in the first year of the upcoming state budget, and $80.2 million lower in the second.

Over the three-year period (the current fiscal year and the two years of the next state budget), all general fund tax collections are expected to be $94.2 million lower than projected in November with the exception of individual income taxes and taxes on vapor products. The largest decrease in projections comes from sales and use taxes.

In addition to the projected $7.1 billion surplus, the state’s “rainy day” budget stabilization fund holds its highest balance in state history, at $1.7 billion.