More than $1 billion in unused COVID-19 pandemic-era funding will be returned to taxpayers five years after it was allocated by Congress, the Labor Department announced.
“The roughly $4.3 billion was intended for states to use for temporary unemployment insurance during the pandemic,” the department said.
“Instead, several states continued spending millions of dollars despite no longer meeting necessary requirements, which was uncovered in a 2023 audit conducted by the department’s Office of Inspector General.”
Under the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, enacted in March 2020, the money was intended for expanded unemployment insurance payments to people out of work during the onset of the COVID-19 pandemic.
The “Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week” program was closed down in 2021, but the inspector general’s audit in 2023 found that some states still had access to the funding.
“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars,” Labor Secretary Lori Chavez-DeRemer said in the statement. “I’m keeping my promise to be a good steward of your money by rooting out waste to ensure American Workers always come First.”
Deputy Labor Secretary Keith Sonderling said in the statement that it is “unacceptable that billions of dollars went unchecked in a program that ended several years ago” and that giving those funds back to taxpayers is part of the administration’s efforts to “eliminate waste, fraud, and abuse.”
During her confirmation hearing in the Senate, Chavez-DeRemer told lawmakers that the Labor Department should align with policies set by the Trump administration and must “focus on practicing fiscal responsibility, reducing unnecessary spending, and optimizing our resources to ensure that taxpayer dollars are utilized effectively.”
On March 10, the Senate confirmed Chavez-DeRemer by a vote of 67–32, including 17 Democrats voting yes and three Republicans voting no.
The Labor Department’s action comes after a judge ruled two months ago that the Department of Government Efficiency (DOGE), which President Donald Trump created as a tool to root out waste, fraud, and abuse, can access agency systems.
A lawsuit filed by several unions asked a federal court to block what it said was DOGE head Elon Musk’s imminent plan to access department systems.
The suit also said this would potentially give Musk access to non-public information from the Occupational Safety and Health Administration’s probes of SpaceX, Tesla, and his tunneling firm, The Boring Company, as well as investigations into his competitors.
But the judge ruled that the unions—represented by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)—had not shown they were harmed by the Labor Department’s actions.
