California Defaults on $18.5 Billion Dollar Debt
1 year ago
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Many Californians don't know they are now responsible for the state’s nearly $20 billion federal loan default, which was taken out to address California’s unemployment fund deficit during the COVID pandemic. The reality of this responsibility came to light when the state ceased making payments on the loan. According to federal law, when a state defaults on a federal unemployment insurance loan, its businesses must repay the debt. The default is further exacerbated by the outdated IT system of California’s Employment and Development Department (EDD), which enabled more than $30 billion in fraudulent unemployment claims during the pandemic.
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