Is the State Scamming You and FEDGOV on the $600 CARES Act Unemployment Money?

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I have wondered before if the ruling class of this state was running a giant scam to defraud the federal government concerning their handling of Affordable Care Act monies from 2013 to 2017? State Senator Bryan King (R, Green Forrest) concluded at the time "it's a scam." Alas we may never get the answer to that one. The records that could have shed light on the issue were sort of "placed under new management" when Governor Asa Hutchinson inexplicably and without the required legislative approval replaced the vendor which had managed the state's DHS information technology contract without complaint for twenty years with another firm even though it's bid was twenty million dollars higher! 

As for Senator King, his reward for investigating "the scam" was that the establishment of his own party ganged up on him and got him beat in a primary. Since then no one else in the legislature seems to be asking the hard money questions that he was asking. Well, maybe Senator Linda Collins-Smith, but she was murdered shortly thereafter. So again, we may never know the answer to that one.

I say all of that because recently I have had reason to wonder if the state, still under the leadership of Governor Hutchinson, isn't scamming FEDGOV yet again, along with many of its own citizens, in the handling of the CARES Act unemployment money? I can take issue with whether the CARES Act was good legislation, but this is not the issue I wish to address here today. Instead, I want to examine the question of whether the state government of Arkansas is defrauding the federal government and it's own citizens in the way it is administrating these funds.

As you may know, workers through their employers pay a little each month into an "unemployment fund" which a worker may draw from if they are unemployed later through no fault of their own. There is a maximum amount of benefits though, so even a worker whose employer has been paying in for fifteen years without interruption can only draw funds back out for a limited period. I think any unused extra money goes back into the pool, but regardless it stays in the state's hands. The maximum amount that can be drawn from the fund is presently $451 a week. Most people draw much less because the amount you can draw from your fund each week is based on your income before you were unemployed.

The state's share of the money paid to the unemployed worker, up to said $451 a week, comes from the pool of money that workers and their employers have paid in unemployment taxes. The $600 from the cares act comes from the Feds separate and apart from that fund. So that a high-wage person now on unemployment would get $451 of state money drawn from their fund each month as well as $600 of CARES Act money. That is a lot of money for not working, but let's focus on the question of whether a much larger amount of money has been taken by the state fraudulently rather than debating the merits of the act here.

Now, look at that picture at the top of this article. It is a screen-shot from an unemployment claim. Look on the row that says "Information on last week claimed". It says "you were processed on $600." The next row, "Remaining Balance" was $3,608 which was indeed $600 less than the same entry last week. The recipient got two deposits to their account, one for $451 from the state money and one for $600 from the CARES Act money.

Do you see the problem? The state is paying only $451 a month from the recipient's unemployment account, not $600. Yet it is subtracting $600 each month from that account. That $600 is coming from the Feds, not the worker's unemployment fund! Every week the state is taking $600 out of that fund even though they are only paying $451 to the recipient. This means the state is keeping $149 of the worker's money each month, and exhausting their unemployment fund much faster than it ought to be.

So imagine a worker that only got $300 in state unemployment each month (and this is more typical, few get $451 a month and many get less). They have been getting $600 taken out of their Unemployment Account each week even though the state has only had to pay them $300 from that fund. Such people tend to have smaller unemployment funds to start with, and this scam will exhaust their benefits much faster than they ought to be. And of course the state is in effect pocketing $300 a week of Federal money inappropriately instead of just $149. It is using federal money to cover its own obligations from the worker's unemployment account funds.

My conclusion is that the state has been improperly administering unemployment insurance and defrauding either FEDGOV, the workers themselves, or both. They should only be taking the amount that THEY had to pay out of the worker's individual unemployment account funds, a maximum of $451 a week, and not the $600 a week which has nothing to do with this fund.

To add insult to injury, at tax time, recipients will be asked to pay state income tax on this money. The money that was left after the state ripped them off the first time! Now maybe I have this wrong, but it doesn't look good and if so someone needs to show why. You may think "there must be some explanation, they wouldn't be this brazen." But they would be, and they have been, and the Big Lie Theory counts on the very fact that people simply refuse to believe that their leaders would be so brazen in order to make it work. They use your own refusal to accept they could be that bad to get away with being that bad. Why has no journalist raised this issue? Why has no Republican official has blown the whistle on this, and no Democrat has either? It is past time citizens kicked both parties to the curb and started something new, in my humble opinion.