The Biden administration is allowing states and municipalities to keep unspent pandemic relief funds until 2024, even after billions have been spent on various projects and services. The Treasury Department has relaxed the rules for how these funds must be used, allowing them to be counted as obligated beyond 2024 if they are reported by April.
This rule change has been criticized as creating a “Bidenomics slush fund” by the Economic Policy Innovation Center. The report suggests that this flexibility in spending may lead to the funds being used for administrative expenses rather than their intended purposes.
However, a Treasury spokesperson clarified that the existing deadline for spending the funds has not changed and that the rule change was made to address grantee questions.
According to recent data, about $90 billion of the original $350 billion allocation has not been approved through an adopted budget. The new rule aims to give states and local governments more time to spend the money rather than returning it to the federal government.
The pandemic relief funds were initially intended to help state and local governments replace lost tax revenue during the economic downturn caused by COVID-19. However, the report suggests that the impact on revenue was not as severe as expected, partly due to shifting work-from-home arrangements and rising property values.
The report by the Economic Policy Innovation Center also highlights various projects and services that have been funded using these relief funds, including golf courses, swimming pools, sports stadiums, and legal services for immigrants and asylum-seekers.
Overall, the report raises concerns about the lack of documentation and transparency in how these funds are being spent and suggests that the Treasury Department is enabling taxpayer abuse.
The new rule from the Treasury Department expands the definition of obligated funds and provides more flexibility to recipients in meeting the deadline for spending the funds.
For more information, visit The Washington Times COVID-19 resource page.