WASHINGTON, D.C. – Today, Congressman Troy Balderson (OH-12) and Senator Eric Schmitt (R-MO) led a group of lawmakers in the House and Senate in introducing a disapproval resolution under the Congressional Review Act aimed at Treasury’s misuse of COVID recovery dollars and their redefining of the original intention of Coronavirus State and Local Fiscal Recovery Funds (SLFRF).
“The Biden Treasury Department is scrambling to keep their ‘COVID’ slush fund up and running even though the public health emergency ended nearly a year ago,” said Balderson. “After ushering in record inflation through reckless spending, the Administration has evidently not learned its lesson. Treasury’s Hoarding Rule is a clear abuse of power by the federal bureaucracy in a desperate attempt to circumvent Congress’s deadline and prolong their taxpayer-funded cash giveaway. Our legislation will step in and block the Administration from doling out billions of dollars under the guise of a national crisis that has long passed.”
“The Biden Administration has become synonymous with wasteful spending, inflationary policies, and economic negligence. Americans are tired of watching hard earned tax dollars be thrown away, and the recent move by bureaucrats in Biden’s Treasury Department to redefine a critical definition of how money is allocated from SLFRF underscores this administration’s disregard for any sort of fiscal responsibility. Standing against business-as-usual out of control spending shouldn’t be a partisan issue - I will continue to act as a voice of reason and advocate for spending within our means here in Washington,” said Schmitt.
Balderson is joined by Representatives Kevin Hern (OK-1), Ben Cline (VA-6), Michael Cloud (TX-27), Randy Weber (TX-14), Chuck Edwards (NC-11) Byron Donalds (FL-19), John Moolenaar (MI-2) Andrew Clyde (GA-9), Glenn Grothman (WI-6), Doug LaMalfa (CA-1), Kat Cammack (FL-3), Harriet Hageman (WY-At-Large), Beth Van Duyne (TX-24), and Jeff Duncan (SC-3).
Senator Schmitt leads an identical resolution in the Senate and is joined by Senators Roger Marshall (R-KS), Tom Cotton (R-AR), Mike Braun (R-IN), Marsha Blackburn (R-TN), Rick Scott (R-FL), Bill Hagerty (R-TN), and Cynthia Lummis (R-WY).
BACKGROUND:
The American Rescue Plan Act of 2021 (ARPA) provided $350 billion for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF). The SLFRF was designed to aid state and local governments with COVID-19 economic recovery. o To date, there is still approximately $109 billion not allocated in SLFRF funding.
By statute, the ability to incur costs with SLFRF funds expires on December 31, 2024. In its original rulemaking, Treasury established that a cost is incurred “if the recipient has incurred an obligation with respect to such cost by December 31, 2024.”
In this new rule, Treasury has changed the definition of an “obligation” under the ARPA to allow states and localities to still spend this funding beyond 2024 so long as they report potential ideas on spending to Treasury before the end-of-year deadline.
Alarmingly, the new obligations can only be for administrative and legal requirements and would not directly benefit taxpayers.
An extension of COVID-19 era funding is especially perplexing as the Biden Administration ended the federal Public Health Emergency for the pandemic on May 11, 2023.
Definition of an obligation:
In 2021, Treasury established that a cost is incurred “if the recipient has incurred an obligation with respect to such cost by December 31, 2024.”
Yet, in November 2023, Treasury redefined an “obligation” differently, permitting recipients to make future agreements to spend SLFRF funds into 2026, not 2024. This perplexing interpretation contradicts the basic definition of an obligation and Congressional intent.
Treasury’s definition even goes against GAO’s definition of an obligation (published this November) that demonstrates the need for a present and definite agreement: “a definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received. . . . An obligation occurs, for example, when an order is placed, a contract is signed, a grant is awarded, or a service is purchased.”
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