Billionaire Elon Musk's Department of Government Efficiency, which aims to cut costs, recently highlighted government inefficiency. This involves hundreds of millions of dollars in unemployment claims that they say were fraudulent and that they reportedly found.

A significant issue is that federal investigators had previously uncovered what appears to be the same fraudulent activity, which occurred years prior and on a considerably larger scale.

On X, the social media site owned by Elon Musk, DOGE recently shared results from a first look at unemployment insurance claims since 2020. The survey showed that 24,500 people over 115 years old claimed $59 million in benefits, 28,000 people between 1 and 5 years old collected $254 million, and 9,700 people with birthdates more than 15 years in the future got $69 million from the government.

The tweet elicited a predictable partisan response of either skepticism or acclaim, including from Musk himself, who described his team's findings as "so astonishing" that he reread them repeatedly before fully comprehending.

"Those statistics are highly unfavourable," he remarked.

Chavez-DeRemer could easily find reports of this kind of fraud within her department's Office of the Inspector General. These reports were made by the same federal workers that DOGE has criticized.

They are trying to create a story that says the government is not good at its job and is not smart, and they are finding problems that the government did not find, says Michele Evermore, who worked on unemployment problems at the U.S. Department of Labor when Joe Biden was president. She says they are finding fraud that was already known to be fraud and saying they discovered it.

While the Social Security Act of 1935 established unemployment benefits in federal legislation, it deferred to individual states the responsibility for creating systems to gather unemployment taxes, manage applications, and distribute aid.

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

Under typical circumstances, state unemployment systems exhibit performance levels ranging from "very well" to "terrible," as stated by Stephen Wandner, an economist at the National Academy of Social Insurance and author of "Unemployment Insurance Reform: Fixing a Broken System." However, with the significant economic impact of COVID-19 and the resulting surge in claims overwhelming state capabilities, Wandner notes that a considerably larger number demonstrated "quite terrible" performance.

On March 27, 2020, Trump enacted the COVID unemployment relief into law, which immediately became a focal point for fraudulent activities. Approximately two weeks later, the Department of Labor issued a memorandum to state officials, cautioning that the augmented benefits had rendered unemployment programs susceptible to widespread fraud, evidenced by a substantial volume of imposter claims submitted using purloined or fabricated identities.

That memo also suggested a way for states to help people whose identity was stolen to get unemployment benefits. To record the fraud but keep innocent people separate from it, the memo said states could make a 'pseudo claim'.

These false claims led to records showing very young children and people over 100 years old getting payments.

The 2023 memo states that many of the claims found were not payments to people over 100 years old, but were actually 'fake records' from fraudulent claims found earlier.

A spokesperson for the Labor Department did not address inquiries regarding Musk's assertions, and DOGE provided no specifics on their process for uncovering the alleged fraud or whether their findings corroborated existing discoveries.

Although DOGE seemed to look at a longer 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 alleged COVID-era unemployment fraud surpassed $45 billion, while the Government Accountability Office subsequently indicated the true figure was considerably higher, probably ranging from $100 billion to $135 billion.

Amy Traub, an unemployment expert at the National Employment Law Project, suggests that this information is not surprising, given its extensive media coverage and numerous congressional inquiries.

If DOGE's newest claims sound familiar, it's because they are similar to its earlier findings about Social Security payments to people who had died and people who were very old. Those claims were not true.

This makes DOGE an imperfect representative, even when fraudulent activity has transpired, such as with unemployment claims.

Jessica Reidl, who works at the conservative think tank The Manhattan Institute, is a fiscal conservative. She strongly believes in getting rid of federal waste and has written 600 articles about it. She thinks there is a lot of unemployment insurance fraud. However, she has difficulty believing anything that DOGE says because she thinks they have not done their job well and may have acted against the law.

"When DOGE claims that very old people who have died are getting unemployment benefits in large numbers, I become doubtful," Reidl says. "DOGE has not been reliable in that area."

Traub said the increase in unemployment fraud during the pandemic caused states to put in place new security measures. She asked why Musk's team was talking about old fraud as if it was new.

Business leaders and economists are warning about a national recession, so it's normal to think about unemployment, says Traub. He adds, "This is an attack on a very important program and maybe an attempt to reduce public support for unemployment insurance at a time when it is most needed."