[continued from previous message]   
      
   …but – and I am not sure how this escaped anyone’s notice, but it sure   
   seems to have – in January, Newsom withdrew the funding from the budget.   
      
   CA just stopped paying on the loans.   
      
   And now?   
      
      
   The state of California has defaulted on $18.5B in federal loans. Who’s   
   getting screwed on this deal?   
      
   Business owners.   
      
   Little did California businesses know that they were cosigners on the   
   state’s nearly $20 billion loan from the federal government that was used   
   to cover California’s unemployment fund shortfall during the COVID   
   pandemic. This ugly truth became apparent when the state recently decided   
   to stop making payments on this loan. When a state defaults on its federal   
   unemployment insurance loan, federal law requires that the state’s   
   businesses repay the loan.   
      
   What makes this default even more egregious is that the stone-age-era IT   
   system of the state’s Employment and Development Department (EDD) opened   
   the floodgates to bad actors, permitting more than $30 billion in   
   fraudulent unemployment claims during the pandemic. Those receiving   
   fraudulent payments include incarcerated felons, a person impersonating a   
   one-year-old, and a person impersonating Senator Dianne Feinstein. A   
   single residential address received checks for around 60 separate   
   individuals filing from that address.   
      
   This could have been avoided with a competent EDD. But this department’s   
   performance has been deficient for decades, and California businesses,   
   many of which are struggling, are left paying for blatant and costly   
   mistakes that should and could have been solved years ago.   
      
   In the frenzied handouts, there was $30B – that’s BILLION with a B dollars   
   – worth of FRAUDULENT claims. Of course, CA stopped paying for fraud   
   detection software. It’s not their money.   
      
   …The EDD’s IT system dates back to the 1980s and uses software over 50   
   years old. After multiple attempts to fix the errors, the scope of the   
   problems became magnified. In 2013, the EDD was granted funding by the   
   Obama administration to purchase fraud detection software from Pondera   
   Systems, which was used until 2016. The software, costing around $2   
   million per year, was discontinued due to the price, which represented   
   less than 1% of the EDD’s budget.   
      
   And it’s going to be no grease off Newsom’s brow.   
      
   …The state had several chances to pay off the debt, including a roughly   
   $100 billion budget surplus the previous year, $27 billion in federal   
   COVID assistance, and a budget record of $300 billion-plus for 2022–2023.   
   The state might have resumed payments this year despite failing, lowering   
   the tax burden on businesses as intended in the 2023–24 budget. The state   
   has reneged on its promise to resume payments or offset rising company   
   federal unemployment insurance fees, though, as its financial outlook   
   deteriorates.   
      
   He’s just handing the whole mess off to the few suckers left still trying   
   to hack out an honest living in that state.   
      
   …With an unpaid federal unemployment insurance loan, the federal   
   government raises the unemployment insurance tax immediately by 0.3   
   percent on each business within the state, and an additional 0.3 percent   
   each year after that until the loan is fully repaid. The normal federal   
   unemployment insurance tax rate is 0.6 percent per year, which means that   
   California businesses will be paying several multiples of the normal   
   federal tax rate before the loan is retired.   
      
   The state’s Legislative Analyst Office predicts that repaying the loan   
   through higher taxes on businesses is not expected until 2029 or 2030 and   
   note that retiring the debt could take longer, depending on the state’s   
   economic performance. A recession would almost certainly delay repayment,   
   and the odds of a recession in the next seven years are significant.   
      
   Don’t forget there’s a reparations brangle coming, too.   
      
      
   Get out of Dodge if you can.   
      
   If you have to stay, how has this clown not been impeached or whatever   
   mechanism they have? I know, I know, – the machine is too strong to do a   
   thing about him.   
      
   But there he shouldn’t be allowed a single moment’s peace in any encounter   
   where he isn’t on the defensive constantly.   
      
   Man has a lot to answer for.   
      
   https://hotair.com/tree-hugging-sister/2023/05/08/newsom-let-ca-default-   
   on-18-6b-in-fed-unemployment-loans-n549204   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)