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**FEBRUARY 21, 2022**

Kuttner on TAP

Windfalls for Regular People

As banks and corporations made fortunes from the pandemic, some workers
accidentally got too much unemployment comp. Until we enact an excess
profits tax, let them keep it!

At a time of deepening pandemic and double-digit unemployment, the
bipartisan CARES Act of 2020 provided extended federal unemployment
compensation, including for people such as freelancers and gig workers
who were not ordinarily covered. For millions of American families, it
was a lifesaver.

When government rushes to meet urgent needs in a crisis, the process is
far from smooth. State unemployment offices were ill-prepared to handle
either the new categories or the surge of applicants.

Now it turns out that some people either didn't provide adequate
documentation, or violated a technical requirement, or were mistakenly
overpaid by overwhelmed state agencies. So those agencies are now trying
to claw back benefits.

In Massachusetts

alone, according to

**The Boston Globe**, the hapless Department of Unemployment Assistance
has been trying to take back $2.6 billion in unemployment benefits from
no fewer than 383,000 residents of the Commonwealth. Similar actions are
occurring in other states
.

Let's put this in context. At the other end of the income spectrum,
shareholders and executives at Moderna reaped billions in profits-that
taxpayers had already financed once through government-sponsored
research. The ultra-low interest rates and massive bond purchases
courtesy of the Fed translated into record financial-industry profits
and executive bonuses for bankers. Oil companies and ocean shippers are
making fortunes off the supply chain shocks.

Nobody is trying to claw back those windfalls. The U.S. Department of
Labor has urged states to err on the side of amnesty

when the overpayments to unemployed workers were the result of innocent
applicant error or mistakes by the state. Amen to that.

Accidental windfalls to ordinary people is truly a man-bites-dog story,
because it's so rare. When we get serious about clawbacks in the form
of excess profits taxes for the big dogs, maybe then in good conscience
we can go after the modest extra payments that flowed to regular
workers.

****

~ ROBERT KUTTNER

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**Robert Kuttner's latest book is**

The Stakes: 2020 and the Survival of American Democracy
.

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