Return to Sender: Labor Department Kicking $1.4 Billion Back to the Taxpayer

President Donald Trump’s appointee to run the Department of Labor is taking back money states should have finished spending years ago.

Labor Secretary Lori Chavez-DeRemer said that she has recovered $1.4 billion in unused funding that states were holding onto from pandemic-era programs, according to a news release posted on the Labor Department’s website.

Chavez-DeRemer said she’s not done putting cash into the Department of Treasury’s general fund. The release said that there is “action being taken to recover” another $2.9 billion.

As the pandemic erupted, the federal government provided billions in emergency unemployment assistance. Not all the money was spent by states during the time of mass layoffs and COVID-19 restrictions, but they held onto it anyway.

Although a 2023 audit uncovered the fact that states were holding onto money to which they had no claim, it took until Chavez-DeRemer’s arrival at the department to begin taking it back.

“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars,” Chavez-DeRemer said.

“I’m keeping my promise to be a good steward of your money by rooting out waste to ensure American Workers always come first,” she said.

“It’s unacceptable that billions of dollars went unchecked in a program that ended several years ago,” Deputy Secretary of Labor Keith Sonderling said. “In a huge win for the American taxpayer, we’ve clawed back these unused funds and will keep working to eliminate waste, fraud, and abuse.”

Government waste hates to see us coming 😎 https://t.co/j4Nmp0ECzj

— U.S. Department of Labor (@USDOL) April 1, 2025

“There’s no reason leftover COVID unemployment funds should still be collecting dust,” DeRemer told Fox News. “I promised to look out for Americans’ hard-earned tax dollars, and we are delivering at the Department of Labor.”

DeRemer said last month that partnering with the Department of Government Efficiency was a major part of her plan for the department.

“Under the leadership of President Trump, our focus remains on promoting job creation, enhancing workforce development, and ensuring safe working conditions, wages, and pensions so that every American has the opportunity to succeed,” DeRemer said in a memo to her staff.

She said the department “must focus on practicing fiscal responsibility, reducing unnecessary spending, and optimizing our resources to ensure that taxpayer dollars are utilized effectively.”

According to an audit released in September 2023, nearly $5 billion of the COVID-era funds remained unused as of July 31 of that year.

The audit said the Employment and Training Administration, a part of the Labor Department, “did not have sufficient controls in place to ensure states accessing funds were in fact eligible for reimbursements or that unused TFFF funds were returned to the federal government,” using the acronym for the Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week program.

The audit noted that it found that “states received TFFF funding when they were not eligible, and states’ TFFF accounts have unused fund balances that have not been reconciled and closed out for deobligation.”

The audit said $105.1 million in questionable costs were identified in four states — Delaware, Oregon, Mississippi, and Louisiana.

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