Covering COVID-19 is a daily Poynter briefing of story ideas about the coronavirus and other timely topics for journalists, written by senior faculty Al Tompkins. Sign up here to have it delivered to your inbox every weekday morning.
An estimated $163 billion in pandemic unemployment benefits instead went to waste and fraud. This is what happens when the federal government shovels trillions of dollars out the door quickly to respond to the pandemic. The Washington Post notes:
Testifying at a little-noticed congressional hearing this spring, a top watchdog for the Labor Department estimated there could have been “at least” $163 billion in unemployment-related “overpayments,” a projection that includes wrongly paid sums as well as “significant” benefits obtained by malicious actors.
In many cases, the criminals stole the unemployment funds using real Americans’ personal information. They bombarded states with applications filed in the names of actual workers or people in prison — sometimes to such a degree that, in the case of Maryland, fraudulent claims came to outnumber real requests for help, according to state correspondence reviewed by The Washington Post.
Criminals employed tools known as botnets to fire off thousands of applications, federal officials say, often with a single computer click. And they openly swapped tips for defrauding the government on popular websites and apps, including the messaging service Telegram. That has continued this year, as research showed at least two dozen groups with nearly 200,000 members openly discussed ways to avert states’ defenses and siphon funds just over an eight-week period in March and April.
Of the $163 billion, government investigators have recaptured about $4 billion, or just less than 3% of what has been stolen. The Post reports that much of that taxpayer money may be lost forever.
Here is the Department of Justice’s webpage that tracks some of the cases it has brought against suspected fraudsters so far.
Why inflation is the No. 1 concern for Americans
The New York Times’ German Lopez put into words what you and millions of others are feeling about inflation. I found myself thinking “uh-huh” after every paragraph. Let me share a bit of it with you:
Inflation stands out from other problems because it is so inescapable. Unlike unemployment, it affects everyone. And people encounter it every day — when they go to the grocery store, drive by a gas station or buy almost anything.
Inflation also contributes to a sense of powerlessness. Rising prices feel like something done to people rather than a problem they brought on themselves. Short of cutting their spending, individuals cannot do much about inflation.
And after decades of stagnant wages and salaries, inflation is yet another example of Americans’ livelihoods failing to keep up with the cost of living.
“People are so raw at this point, having lived through two years of Covid, that any new thing is going to make them upset and angry,” said George Loewenstein, a behavioral economist at Carnegie Mellon University. “It just feels like it’s one thing after another.”
The new wholesale inflation figures (the Producer Price Index) just came out and, while they do not get as much coverage as the Consumer Price Index, they tell us something about what is ahead. It could be at least a little bit encouraging. The prices that wholesalers pay before they pass costs on to you are rising 11% over last year, which is even more than the 8.3% consumer inflation level. The only encouraging news about the 11% figure is it is not as high as it was in March (11.5%). But 11% was higher than economists predicted.
PNC Bank senior economist Kurt Rankin put it this way when talking to CNN Business:
“The end result is that even if easing in April’s PPI inflation has staying power, consumers can still expect to see rising prices for several more months based solely upon producers and services providers accounting for the higher costs they themselves have endured.”
The upshot of this for journalists is not just to talk with retail customers, but go upstream to manufacturers, farmers, small businesses and help the public understand why consumer prices are higher. You will find in many cases that the manufacturers and producers are eating a lot of the higher costs fearing customers won’t stand for increases coming at them from every side. You may also learn about inventives and creative ways producers are finding ways to economize.
The National Federation of Small Businesses said its members are so concerned about their future that the “Small Business Optimism Index” is at a nearly five-decade low. Small businesses are struggling to hire workers, have nagging supply chain problems and are getting hit by price hikes at every turn. The report says:
The frequency of reports of positive profit trends was a net negative 17%. Among the owners reporting lower profits, 34% blamed the rise in the cost of materials, 22% blamed weaker sales, 14% cited the usual seasonal change, 11% cited labor costs, 9% cited lower prices, and 2% cited higher taxes or regulatory costs. For the owners reporting higher profits, 51% credited sales volumes, 13% cited usual seasonal change, and 19% cited higher prices.
Journalists, make no mistake, many of these businesses are also your company’s advertisers and what affects them will eventually affect you. The National Federation of Independent Businesses laid the future out to its members this way (warning, it is not pretty):
Owners are very pessimistic about sales and business conditions in the second half of the year. This dampens capital investment and, eventually, will feed into employment if sales actually slow as expected. Financial markets have already made significant adjustments to changes in Fed policies and the uncertainties of war and Covid shutdowns that continue in China. More is likely to come as assets, financial and real estate, are highly overpriced. Trying to “catch up” runs a growing risk of “overshoot,” hopefully that won’t happen.
While inflation remains uppermost in the minds at the Federal Reserve, the “R” word (recession) has increasingly appeared in the prognostications of economists. Predictions have a recession starting as early as the third quarter of this year, although most guesses have 2023 for the start.
Store-hopping to save money
The New York Times had an interesting piece on how inflation changes people’s buying habits, including hopping from one grocery to another to save money. They buy bulk items at one place, then buy meat at another and fruit at another. It made me wonder if, once you factor in gasoline prices, they really save much.
Help for journalists covering the pediatric hepatitis outbreak
The Association of Health Care Journalists provides a nice collection of media-friendly experts and context to help cover the still confounding outbreak of pediatric hepatitis around the globe, including 25 U.S. states. Last week, two cases emerged in Michigan.
Last week the Centers for Disease Control and Prevention said, along with state partners, investigators are gathering data on “109 children with hepatitis of unknown origin across 25 states and territories, more than half of whom have tested positive for adenovirus with more than 90% hospitalized, 14% with liver transplants, and five deaths under investigation. Because this investigation is ongoing and includes reviewing cases of hepatitis of unknown cause with onset since October 2021, patients under investigation are not limited to current or newly diagnosed pediatric hepatitis illnesses.”
AHCJ notes that it is possible that many other cases have not been reported:
If you are covering this topic, here are a few useful stories to read to help you get up to speed. One by the Center for Infectious Disease Research and Policy and another by the Washington Post. You can also listen to the recording of the CDC’s May 6 briefing.
Could unexplained pediatric hepatitis cases be linked to dogs?
The World Health Organization reported 228 probable cases and more are under investigation in 20 countries. Considering these are global figures, it may not sound like an overwhelming concern, but hepatitis is not common in children.
Newsweek notes, “A possible link between the unusual number of acute pediatric hepatitis cases and dogs originated with a report Friday from the U.K. Health Security Agency.” The investigators took interest in the fact that 70% of the British cases were in children who had a family dog in the household. But then, the investigators noted, dog ownership is high in Britain. The CDC says it is looking at the possible link too, but they are not certain if there is a link.
At the moment, researchers say adenovirus (usually a mild disease in children) is the leading theory of what is causing the hepatitis cases. Researchers know of no connection to COVID-19, although they are still looking for a link. Researchers say it certainly is not related to COVID-19 vaccines since most of the pediatric cases involved children who were too young to be vaccinated.
What is the new threshold for mask mandates?
Even in Democrat-run cities that once imposed mask mandates, there is some new invisible threshold that city leaders are reluctant to define. Nobody wants to impose mask mandates even as COVID-19 cases rise. The Washington Post explores what level of infection it might take to reinstitute mandates:
“They are responding to the public,” said Marcus Plescia, chief medical officer of the Association of State and Territorial Health Officials. “People are really fed up with all of these restrictions.”
But it’s too soon to declare government mask mandates a relic of the past. Under a new CDC framework, people should still wear masks when their communities are considered high risk. But the definition of high risk has shifted to emphasize hospitalizations and the strain on the health-care system, rather than a high volume of cases.
Officials say mask mandates would probably be tied to cases again under a dreaded scenario where a highly contagious variant that evades vaccine protection and causes more severe disease emerges.
If the IRS delays your tax refund, it may owe you interest
The IRS is sitting on millions of delayed tax returns. If yours is among them, the IRS may owe you interest. Fortune says staffing shortages and a previous backlog at IRS are slowing the turnaround time for you to get your refund.
As of April 29, the IRS has 9.6 million unprocessed individual tax returns.
The IRS has 45 days to process returns and issue refunds. After that, it’s required to pay interest. And starting last month, that interest rate jumped to 4% for individuals. (On the average refund of $2,800, that would work out to $112.)
The interest is paid quarterly.
While most refunds are processed within 21 days, the agency is in the midst of a budget crisis, and at the beginning of this year’s tax season, millions of unprocessed individual returns 2021 remained.
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