Biden faces $ 1.9 billion COVID aid limits as some states resist



WASHINGTON (AP) – President Joe Biden entered the White House promising to stop the twin health and economic crisis caused by COVID-19, but $ 1.9 trillion and countless initiatives later he faces the limits on what Washington can achieve when certain states and local governments are unwilling or unable to step up.

Six months after Congress passed the massive bailout, administration records show more than $ 550 billion has yet to be disbursed. The money could help provide key economic support as the delta variant of the coronavirus continues to pose a threat. But in some cases it has also led to frustration as tenant aid, tests and vaccines are not used despite mass awareness campaigns.

Republican critics say the unspent money shows Biden’s relief plan was too big and inflationary; the administration says unspent funds reflect the extent of planning in case the recovery from the pandemic hits more problems with viral mutations and unexpected economic disruption. By law, around $ 105 billion in state and local aid and more than half of the extended children’s tax credits cannot yet be paid.

“There are things designed to deal with immediate difficulties and others that are designed to enable a multi-year policy response – these aren’t really bugs, they are features,” said Gene Sperling, who oversees the plan. rescue service from Biden. . “The fact that a solid portion of these funds can be used over a period of a few years is good news for ensuring a sustainable recovery.”

But some of the backlog stems from bottlenecks – or outright bottlenecks – at the state or local level, beyond Washington’s influence. The magnitude of the challenge was apparent when Biden recently announced new vaccine requirements for federal workers and employers with 100 or more workers and stressed the need to test and keep schools open.

“We are facing a lot of backlash, especially from some Republican governors,” Biden said Thursday. “The governors of Florida and Texas – they are doing everything they can to undermine the rescue requirements that I have proposed.”

The Department of Health and Human Services and the Centers for Disease Control and Prevention have implemented “Operation Expanded Testing” to work with schools, homeless shelters and care facilities to provide drug testing at no cost to most organizations, and CDC offered technical services. expertise – but that does not mean that states will do it.

Iowa and Idaho, for example, have rejected tens of millions of dollars in federal aid to boost virus testing in schools. In Texas and a handful of other GOP-controlled states, officials have decided to block schools from performing contact tracing – for which they have received federal dollars – or requiring the wearing of a mask.

There have been a few bright spots, the administration said, including Georgia and Massachusetts, where states have used federal resources to help keep students safe.

White House officials are frustrated at the slow pace of distributing money for some programs, but argue that what remains is largely out of their control.

Large pockets of money flowed through existing channels – for example, expanded tax credits, which required relatively minor adjustments from the IRS. But the federal government has also been tasked with putting in place entirely new initiatives from the ground up, with little carrots or sticks to encourage local officials to join us.

Privately, some officials believe the country as a whole had the tools to avoid the shock of the latest delta wave and its impact on the economy through vaccinations, robust testing and economic relief money – but did not act quickly enough to use them.

The Biden administration can report clear successes with its relief program. Economic growth has increased sharply this year, with monthly job gains averaging 636,000 and demand exceeding the supply of automobiles, furniture, appliances and other goods. The president and his associates cite forecasts suggesting that US economic growth could be the strongest in four decades.

Yet the delta variant has slowed economic activity, with hiring falling in August to just 235,000 additional jobs. The slowdown overlapped with the expiration of expanded unemployment benefits, causing 8.9 million people to lose weekly benefits and 2.1 million people to additional unemployment benefit of $ 300 per week.

The delta variant has spread as funds to fight COVID-19 remain untapped.

Of the $ 51 billion earmarked for testing, monitoring, and research and development of Biden’s plan, the administration said $ 13.9 billion has yet to be distributed and will be used to combat the delta variant. Only 10% of the money for homeowner aid went to the states, and tenant aid was so unevenly distributed that the Treasury Department announced on Tuesday that “high-performance” states and cities would move into the next one. $ 13 billion round, although other locals have yet to release funds.

“Absolutely, it was too important,” said Marc Goldwein, senior vice-chair of the Privy Committee for a Responsible Federal Budget. “But it was also poorly designed in terms of timing and composition – there were places we should have spent longer or longer.”

Goldwein said unemployment benefits should have been gradually reduced. Direct checks could have been split into multiple rounds, instead of a single payment of $ 1,400 for each eligible person. State and local funds could have been disbursed in conditional installments.

Administration officials said the government was generally successful in providing direct payments to individuals, child tax credits and forgivable loans to businesses. The roughly $ 400 billion in out-of-pocket payments were all spent quickly, as was the $ 28.6 billion in aid to restaurants that lost revenue during the pandemic. They noted that the administration is expected to meet or exceed the Congressional Budget Office’s spending forecast for this fiscal year.

Channeling funds through state and local governments was more of a challenge. Administration officials said the Trump administration left them without a decent infrastructure for these programs despite approving around $ 4 trillion in aid before Biden became president.

The Biden administration changed its guidelines to release rent assistance at a faster rate to limit evictions, but found that an awareness campaign involving the coordination of 437 separate jurisdictions led to mixed results. Not enough cities could replicate the programs seen in Houston, Philadelphia and Louisville, Kentucky.

But in many cases, the federal government was prepared to let states, counties and cities take a more patient approach with $ 350 billion in direct aid, of which $ 105 billion has yet to be distributed.

Even the money that has been disbursed has not necessarily been spent. State and local governments have until 2024 to spend it.

“It is still too early to judge whether the program has been successful,” said Alan Berube, senior researcher at the Brookings Institution. “The administration and Congress want cities to think about using the funds not only for an immediate recovery, but also to ensure an inclusive and sustainable rebound.”


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