House Democrats removed plans to include $15.6 billion for COVID-19 aid in the omnibus package for fiscal year (FY) 2022 after multiple rank-and-file lawmakers expressed outrage that $7 billion of the funds would be offset by rescinding Coronavirus State and Local Fiscal Recovery Funds (SLFRF) that were included in the “American Rescue Plan Act” (ARPA). The Biden administration requested $22.5 billion for testing, therapeutics, vaccines, and efforts to prepare for future variants, but Congress whittled that request down to $15.6 billion in negotiations with Republicans, who resisted spending any new money on the pandemic. Top Democrats agreed to offset the funding from existing programs, including the SLFRF program. However, more than a dozen lawmakers threatened to vote against the procedural rule needed to advance the omnibus bill, causing party leaders to strip the COVID-19 money from the broader $1.5 trillion FY22 spending package.
The SLFRF program provides $350 billion to state, local, and tribal governments to respond to the COVID-19 public health emergency, address its economic fallout, and lay the foundation for an equitable recovery. States and localities across the country are using SLFRF funds to fund rental assistance, address homelessness, and expand the availability of affordable housing. Yet some states were not provided a full allotment of aid after ARPA was enacted. Instead, the law prioritized states with unemployment rates that were at least 2 percentage points above their pre-pandemic levels. While those states received full allotments, the remaining 30 states have yet to receive their second tranche of funds, which are scheduled to be delivered this May. As a result, the initial COVID-19 relief spending plan included in the omnibus package could have rescinded aid for the 30 states that had not yet received their full shares of SLFRF funds. In a “Dear Colleague” letter sent on March 9, House Speaker Nancy Pelosi (D-CA) wrote that under the plan, states would have received at least 91% of the $195 billion in total funding they were expecting and that local governments would receive no cuts in funding. Local leaders, however, expressed concerns with the proposal to rescind state funding, which would ultimately impact cities and towns.
Congresswoman Cori Bush (D-MO) released a statement vehemently opposing efforts to rescind SLFRF funds, noting that Missouri had already appropriated these funds for housing, childcare, health care, and schools. The National Governors Association also sent a letter to congressional leadership on March 8, urging lawmakers to safeguard the SLFRF funds included in ARPA. The governors expressed strong opposition to any recission of SLFRF funds, stating that taking away these resources “would jeopardize our shared goals of mitigating, responding to, and fostering a transformational recovery form this unprecedented national pandemic.” Meanwhile, Wisconsin Governor Tony Evers sent a letter to congressional leaders condemning the plan, which would rescind an estimated $225 million of Wisconsin’s SLFRF funds.
In addition to funding for tests, vaccines, and treatments, the “COVID-19 Supplemental Appropriations Act of 2022” included $55 million to help the U.S. Department of the Treasury better administer coronavirus relief programs. The House has postponed consideration of the standalone COVID-19 aid bill until at least this week. The new version of the bill would be partially offset by means of unspent pandemic funds and would not require touching SLFRF funds. Unless the COVID-19 aid package is fully paid for, however, it faces a dim outlook in the Senate, where 10 Republican votes would be needed to pass the bill.
Read NLIHC’s fact sheet on the SLFRF program at: https://bit.ly/3zztxad
Learn more about how states and localities are using SLFRF funds for housing at: https://bit.ly/3I7yjP2