Waste of the Day: $189 Billion In Pandemic Aid Can Be Used for Non-Covid Costs

This story originally was published by Real Clear Wire

By Adam Andrzejewski
Real Clear Wire

Of the $325 billion given to states and local governments to help cover costs stemming from the effects of the Covid-19 pandemic, less than half of that has been spent. And instead of returning the taxpayer funds to the federal government, a new law from the Department of the Treasury allows states and local governments to spend that money on essentially anything.

The law also applies to an additional $25 million given to tribal governments ($20 billion) and U.S. territories ($4.5 billion).

Under the American Rescue Plan Act, which allocated the funds, state and local governments must obligate the funds before the end of 2024. The new rule allows governments to count funds as obligated if they are merely reported to the Treasury by April 2024.

In other words, if states and local governments and the other entities haven’t needed to spend all the money they received for pandemic relief, they can just say it’s been obligated and keep it.

The 50 states and Washington D.C. received $195 billion, and local governments received $130 billion, according to the U.S. Government Accountability Office.

States only spent 45% of the pandemic aid ($88.2 billion) they were given, and local governments only spent 38% ($47.9 billion). That leaves $189 billion of unspent funds that can be used for whatever these governments want, including updating swimming pools, golf courses and sports stadiums at a time when the country’s national debt has exceeded $33 trillion.

Critics have referred to it as a President Joe Biden “slush fund” that allows states and local governments to go on spending sprees with money that was supposed to be for emergency pandemic relief.

“Treasury’s ‘Hoarding Rule’ is an outright abuse of power and should be immediately reversed,” the Economic Innovation Policy Center said. “Congress should assert its intentions. Stakeholders (including taxpayers) should engage in the notice and comment period, which is set to end on December 20,2023, regardless of the rule already taking effect.”

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