In compliance with clause 3(c)(3) of rule XIII of the Rules of the House of Representatives, requiring a cost estimate prepared by the CBO, the following statement by CBO is provided.
The bill would: Extend the statute of limitations for federal criminal fraud charges related to unemployment compensation Rescind funding for program integrity activities by state unemployment insurance agencies Estimated budgetary effects would mainly stem from: Increasing states' administrative costs that would be reimbursed by the Department of Labor Rescinding funds for program integrity activities Bill summary: H.R. 1156 would extend the statute of limitations from 5 to 10 years for federal criminal prosecution and civil enforcement actions for fraud related to the temporary unemployment programs enacted during the coronavirus pandemic. Under current law, the statute of limitations for those offenses will begin to expire in March 2025. Currently, states refer unemployment insurance claims involving allegations of fraud to the Office of Inspector General (OIG) at the Department of Labor (DOL) for further investigation. That office reviews cases and refers findings to the Department of Justice (DOJ) or other entities for criminal or civil prosecution. The bill also would rescind direct appropriations provided for program integrity activities in the American Rescue Plan Act of 2021. Estimated Federal cost: The estimated budgetary effect of H.R. 1156 is shown in Table 1. The costs of the legislation fall within budget functions 500 (education training, employment, and social services), 600 (income security), and 750 (administration of justice).
Estimated Budget Authority 0 * * * * * * * * * * * * Estimated Outlays -3 1 1 1 * * * * * * * * *
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization * 2 1 1 1 * n.e. n.e. n.e. n.e. n.e. 5 n.e. Estimated Outlays * 2 1 1 1 * n.e. n.e. n.e. n.e. n.e. 5 n.e. -------------------------------------------------------------------------------------------------------------------------------------------------------- n.e. = not estimated; *= between -$500,000 and $500,000. CBO estimates that enacting H.R. 1156 would increase revenues by less than $500,000 over the 2025-2035 period.
Basis of estimate: CBO assumes that the bill will be enacted in March 2025. Estimated outlays are based on historical patterns for existing and similar activities. Direct spending and revenues: CBO estimates that enacting H.R. 1156 would increase net direct spending and revenues by less than $500,000 over the 2025-2035 period (see Table 2).
Extend the Statute of Limitations: Estimated Budget Authority 5 * * * * * * * * * * 5 5 Estimated Outlays * 3 1 1 * * * * * * * 5 5 Rescind Funding for Program Integrity Activities: Budget Authority -5 0 0 0 0 0 0 0 0 0 0 -5 -5 Estimated Outlays -3 -2 0 0 0 0 0 0 0 0 0 -5 -5 Total Changes: Estimated Budget Authority 0 * * * * * * * * * * * * Estimated Outlays -3 1 1 1 * * * * * * * * * -------------------------------------------------------------------------------------------------------------------------------------------------------- *= between zero and $500,000.
Extend the statute of limitations: Upon the enactment of H.R. 1156, CBO expects that DOL would provide additional funding to states to continue their referrals of cases to DOL and provide information about those cases to the department's OIG and federal law enforcement agencies. Under current law, DOL has permanent authority to fund whatever amounts are necessary for those activities for pandemic-related programs. Using information from DOL, CBO estimates that under the bill the department would provide $5 million in additional funding to states, increasing direct spending by the same amount over the 2025-2035 period. By extending the period for which DOJ could pursue prosecutions, CBO expects that H.R. 1156 would increase the collections of penalties and the recovery of additional benefits paid fraudulently in 2025 and subsequent years. That change would not affect state laws or rules governing the recovery of overpayments. Based on an analysis of data for similar offenses from the U.S. Sentencing Commission, CBO estimates that the increase in penalty collections would be insignificant. Criminal and civil fines are recorded in the budget as revenues; criminal fines are deposited into the Crime Victims Fund and spent without further appropriation. Thus, CBO estimates that enacting H.R. 1156 would increase revenues and the associated direct spending from penalty collections by less than $500,000 over the 2025-2035 period. Additionally, using information from DOL and DOJ, CBO estimates that any additional recoveries of overpaid benefits, which are recorded as reductions in direct spending, would be insignificant. The extent to which any additional recoveries would happen is highly uncertain. Rescind funding for program integrity activities: The bill would rescind $5 million in mandatory funding provided in the American Rescue Plan Act to state unemployment insurance agencies for program integrity activities, which are undertaken to ensure that benefits are paid correctly. Using information from DOL, CBO estimates that the rescission would decrease direct spending by $5 million over the 2025-2035 period. Spending Subject to appropriation: CBO assumes that if the statute of limitations were extended, more potential fraud cases would be referred to the OIG, and that office would continue to investigate cases it might otherwise have dropped. Using information from the Department of Labor, CBO estimates that the OIG would require an additional $5 million over the 2025-2030 period to handle those referrals and cases. Assuming appropriation of the estimated amounts, CBO estimates that outlays for those activities would total $5 million over the same period (see Table 1). Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. CBO estimates that enacting the bill would increase direct spending by less than $500,000 over the 2025-2035 period and increase revenues by less than $500,000 in every year and over the 2025-2035 period (see Table 3).
Increase in long-term net direct spending and deficits: CBO estimates that enacting H.R. 1156 would not significantly increase net direct spending in any of the four consecutive 10- year periods beginning in 2036. CBO estimates that enacting H.R. 1156 would not significantly increase on-budget deficits in any of the four consecutive 10-year periods beginning in 2036. Mandates: The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. Estimate prepared by: Federal costs: Jeremy Crimm (Department of Justice), Meredith Decker (Department of Labor); Mandates: Erich Dvorak. Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income Security Cost Estimates Unit; Justin Humphrey, Chief, Finance, Housing, and Education Cost Estimates Unit; Kathleen FitzGerald, Chief, Public and Private Mandates Unit; Christina Hawley Anthony, Deputy Director of Budget Analysis; H. Samuel Papenfuss, Deputy Director of Budget Analysis. Estimate approved by: Phillip L. Swagel, Director, Congressional Budget Office.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE