The Labor Department recently got $2 billion for the administrative costs of unemployment insurance delivery. Democratic Lawmakers have a plan for how the agency should use it.
Democrats in the House and Senate are urging the federal government to take an active role in modernizing the fragmented, outmoded technology used by states to deliver unemployment benefits.
That tech foundation has been tested over the past year as applicants flock to the system during the economic upheaval caused by the pandemic. At the same time, state benefit agencies have seen massive increases in fraudulent claimants, delivering billions to potentially fraudulent claims between March and October last year.
The American Rescue Plan appropriated $2 billion to the Labor Department for administrative costs related to fraud prevention, equitable access and timely payments of unemployment benefits. 30 Democrat senators and members of Congress have thoughts about how the agency should use it, which they laid out in a letter sent to newly confirmed Labor Secretary Marty Walsh on Tuesday.
The lawmakers are asking that the Labor Department use a recently introduced bill, the Unemployment Insurance Technology Modernization Act, as a blueprint to their efforts related unemployment IT modernization.
The bill, introduced by Sen. Ron Wyden (D-Ore.) and Rep. Steven Horsford (D-Nev.), would put the Labor Department at the center of a national effort to modernize unemployment tech by developing and maintaining a set of modular technology pieces for states to piece together in their modernization efforts as they see fit.
Likewise, any unemployment technology modernization efforts the Labor Department pursues with their new funds should center on developing federal technology for unemployment administration, they wrote.
"This past year has proven that individual states attempting to modernize their system in isolation hasn't yielded results. That failure has contributed to unconscionable delays for millions of workers," the group wrote. "A cohesive federal approach would not only ensure that every state has access to modern, efficient technology to meet their needs, but would also be far more cost effective than investing in 53 separate systems."
If the department were to follow the bill's plan, it would also create a digital services team to help states and agencies with their tech needs. The bill also emphasizes the centering of customer experience in the development process and the use of best practices in terms of cybersecurity and procurement.
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