The Department of Government Efficiency, spearheaded by billionaire Elon Musk and focused on reducing expenditure, has reportedly identified hundreds of millions of dollars lost through fraudulent unemployment claims, representing the most recent instance of wasteful government spending they have highlighted.

However, a significant issue arose: Federal investigators had previously uncovered what appeared to be the same fraudulent activity, which occurred years earlier and on a significantly larger scale.

Last week, a post on X, the social media site owned by Musk, shared the results of a first look at unemployment insurance claims since 2020. It said that 24,500 people over 115 years old claimed 59 million dollars in benefits. Also, 28,000 people between one and five years old got 254 million dollars, and 9,700 people with birthdates more than 15 years in the future received 69 million dollars from the government.

The tweet elicited the expected partisan responses of either doubt or acclaim, including from Musk himself, who described his team's findings as "so extraordinary" that he reread them multiple times before fully comprehending.

"Those figures are quite alarming," he remarked.

However, Chavez-DeRemer could easily find such fraudulent activity documented within her department's Office of the Inspector General, reported by the very federal employees DOGE has criticized.

Michele Evermore, who worked on unemployment issues at the U.S. Department of Labor under the last president, says, "They are trying to create a story that the government is bad at its job and not smart, and they are saying they are finding problems the government missed." She adds, "They are finding fraud that was already known about and saying they found it themselves."

The Social Security Act of 1935 formalized unemployment benefits within federal legislation but delegated the responsibility to individual states to establish frameworks for collecting unemployment taxes, handling applications, and distributing assistance.

Even though states mostly control their unemployment systems, special programs, like the much bigger benefits started by the first Trump administration when the COVID pandemic began, bring more direct help from the federal government and many new people into the system.

According to Stephen Wandner, an economist at the National Academy of Social Insurance and author of "Unemployment Insurance Reform: Fixing a Broken System," state unemployment systems typically exhibit a range of performance, from excellent to poor. The economic impact of COVID-19 and the resulting surge in claims, which overwhelmed state capacities, led to a significant increase in systems functioning exceptionally poorly, Wandner contends.

The COVID unemployment relief bill, signed into law by Trump on March 27, 2020, quickly attracted widespread fraudulent activity. Approximately two weeks later, the Department of Labor cautioned state officials in a memo that the enhanced benefits had rendered unemployment programmes susceptible to fraud, citing a substantial volume of imposter claims submitted using stolen or fabricated identities.

The same memorandum proposed a strategy for states seeking to safeguard individuals whose identities had been compromised and used to illicitly obtain unemployment benefits.

These fake applications meant that records showed very young children and people over 100 years old getting money. The Labor Department's inspector general counted almost 5,000 unemployment applications from people over 100 between March 2020 and April 2022. However, another document from the department explained that these applications happened because states changed birth dates to protect people whose identities were stolen.

"Numerous claims identified ... did not pertain to payments made to individuals exceeding 100 years of age, but instead represented 'pseudo records' of fraudulent claims previously uncovered," states the 2023 memo.

A spokesperson for the Labor Department did not provide answers regarding Musk's assertions, and DOGE offered no specifics on their method for uncovering the alleged fraud or whether their findings mirrored those already established.

Although DOGE looked at a longer time period than federal investigators had before, it only found $382 million in fake unemployment claims. This was a very small amount compared to what investigators already knew about.

In 2022, the Labor Department estimated suspected COVID-era unemployment fraud exceeded $45 billion; however, the Government Accountability Office subsequently indicated the figure was significantly higher, likely ranging from $100 billion to $135 billion.

"It is widely known," remarks Amy Traub, an authority on joblessness at the National Employment Law Project. "Numerous reports have confirmed it, and several congressional inquiries have been conducted."

If DOGE's latest claims sound familiar, it's because they are similar to its previous findings about Social Security payments to people who were dead or very old. Those claims were not true.

This means DOGE isn't a good way to share information, even when there's fraud, like with unemployment claims.

Jessica Reidl, who works at the conservative group The Manhattan Institute, is a fiscal conservative. She strongly believes in stopping the government from wasting money and has written 600 articles about it. She thinks there is a lot of unemployment insurance fraud. However, she finds it hard to agree with anything that DOGE says because she thinks they have not done their job well and may have broken the law.

"When DOGE says very old dead people are getting unemployment money in large numbers, I start to doubt it," Reidl says. "DOGE has not been right about things like that before."

Traub asserted that the surge in unemployment fraud during the pandemic prompted states to adopt enhanced security protocols. She questioned the rationale behind Musk's team highlighting dated instances of fraud as if they were recent occurrences.

"With business leaders and economists predicting a national recession, concerns about unemployment are understandably prevalent," states Traub. "This constitutes an assault on the reputation of a crucial initiative and possibly an endeavour to erode public confidence in unemployment insurance at a time when its significance is paramount."