GOP lawmakers should shut down wasteful pandemic “slush funds” now
With the federal government nearly $34 trillion in debt, in no small part because of the spending spree of the last few years, you would think Washington would have an interest in exercising some spending restraint. Think again.
A report issued this week highlighted the ways in which federal bureaucrats are still encouraging states to spend “slush fund” dollars issued more than two years ago. When it comes to buckets of money Republicans in the House should insist on returning to taxpayers, this fund represents a good — but by no means the only — place to start.
Rewriting Spending Parameters
The report by the Economic Policy Innovation Center focuses on a rule issued by the Biden administration just before Thanksgiving. The rule — issued without prior public comment, and without designation as a “major rule” subject to congressional notification — gave states and local governments until 2026 to spend funds initially appropriated in the 2021 “stimulus” measure.
The rule allows states and local governments to spend up to 10 percent of their appropriated funds on things like ”reporting and compliance requirements,” “audit costs,” and ”record retention and internal control requirements,” including personnel costs associated with the same. In other words, states and local governments can now use these federal dollars to fund bureaucrats’ salaries — because that’s just what the American people need: more government bureaucrats.
The report also highlights some of the ridiculous spending associated with the $350 billion provided to state and local government, some of which was previously cataloged by the Associated Press and reported in The Federalist. The list of pork projects includes $185 million in federal funds spent on golf courses, money for a circus, the use of federal dollars to fund services for asylum seekers — thereby encouraging and exacerbating the ongoing chaos at the border — and three states employing “diversity, equity, and inclusion” (DEI) coordinators on federal taxpayers’ dime.
Isn’t the Pandemic Over?
The report notes that, of the $350 billion appropriated for state and local governments in March 2021, a total of $241 billion has been budgeted by the relevant governments as of this June, while only $198 billion has been contractually obligated. But amidst the legal and procedural details about the Biden administration’s pre-Thanksgiving rule, one not-insignificant detail goes unmentioned through much of the paper.
Democrats and the Biden administration appropriated the $350 billion in state and local “slush funds” in March 2021 to, as the Treasury put it, ”support [the governments’] response to and recovery from the COVID-19 public health emergency.” But the public health emergency for the pandemic ended on May 11 and arguably should have ended months, if not years, earlier.
With almost half — $152 billion of the $350 billion, or 43.4 percent — not formally obligated as of June 30, how exactly can these federal dollars help ”support the response to” a pandemic after that pandemic has ended? And if states and local governments haven’t appropriated these funds after two and a half years, how much of an “emergency” do they really face that they need these dollars?
States Swimming in Revenue
To most conservatives, the answers should be obvious. In fact, as the Economic Policy Innovation Center report notes, states had little need for these funds in the first place, as the loss in tax revenue that some feared did not materialize.
While some thought the government-imposed lockdowns at the start of the pandemic would cause major revenue shortfalls, those scenarios did not pan out in most cases. Instead, the Federal Reserve’s massive infusions of cash inflated the prices of stocks (along with much else). When individuals sold stocks and other assets during this Fed-induced bubble, they realized significant capital gains, leading many states to exceed their prior revenue estimates.
Claw the Money Back
To sum up: States are sitting on as much as $152 billion in unobligated federal funds originally designed to “respond to” a pandemic that has long since abated, while Washington just ran what amounts to a $2 trillion deficit in the fiscal year that ended in September. Clawing back these unneeded funds makes so much sense that… the Biden administration just issued the aforementioned rule designed to give states more latitude to sit on, and then spend, the federal cash.
Thankfully, Congress can have a say in the matter. When they finally complete work on the annual spending bills for the current fiscal year, Republicans should
What are the potential consequences of diverting up to 10 percent of funds for purposes other than their original intended use?
Rewriting Spending Parameters: Federal Bureaucrats Encourage Unnecessary Spending
The federal government’s staggering debt of nearly $34 trillion has been a cause of concern for many Americans. With the spending spree of the last few years being a significant contributor to this debt, one would expect Washington to exercise some spending restraint. However, recent reports have shed light on the fact that federal bureaucrats are still encouraging states to spend “slush fund” dollars that were issued over two years ago. It is concerning that even when it comes to returning funds to taxpayers, this fund is just one among many that should be prioritized.
The report, issued by the Economic Policy Innovation Center, focuses on a rule implemented by the Biden administration just before Thanksgiving. This rule, which was issued without prior public comment and without designation as a “major rule” subject to congressional notification, allows states and local governments until 2026 to spend funds initially appropriated in the 2021 “stimulus” measure. However, the rule also permits the diversion of up to 10 percent of these funds for purposes such as reporting and compliance requirements, audit costs, and record retention and internal control requirements – including funding personnel costs. In other words, these federal dollars can now be used to fund bureaucrats’ salaries, an addition of more government employees that the American people do not need.
The report further highlights some of the ridiculous spending associated with the $350 billion provided to state and local governments, with previous cataloging done by the Associated Press and reported in The Federalist. This spending list includes $185 million in federal funds spent on golf courses, funds allocated to circuses, the utilization of federal dollars to support services for asylum seekers, which contributes to the ongoing chaos at the border, and the employment of “diversity, equity, and inclusion” (DEI) coordinators in three states using federal taxpayers’ money.
One might question why such spending is taking place, particularly when the pandemic is seemingly over. The report points out that out of the $350 billion allocated to state and local governments in March 2021, only $198 billion has been contractually obligated, with $241 billion budgeted by the relevant governments as of June. However, amidst the legal and procedural details surrounding the Biden administration’s pre-Thanksgiving rule, an essential detail is often overlooked in the report.
It is crucial to note that the $350 billion “slush funds” were appropriated by Democrats and the Biden administration in March 2021 to support the response to and recovery from the COVID-19 public health emergency, as stated by the Treasury. However, the public health emergency for the pandemic officially ended on May 11, with arguments suggesting that it should have ended months, if not years, earlier. Therefore, with almost half of the funds, $152 billion or 43.4 percent, remaining unobligated as of June 30, it is questionable how these federal dollars can contribute to a response to a pandemic that has already ended. Additionally, the fact that states and local governments have not yet appropriated these funds after two and a half years raises doubts about the level of emergency they truly face and whether they genuinely require the funds.
In conclusion, the ongoing encouragement of unnecessary spending by federal bureaucrats is a matter of concern for the nation, especially given the alarming debt the federal government is burdened with. The misuse and appropriation of funds not only fail to prioritize the interests of taxpayers but also raise questions about the true emergency that justifies such expenditures. It is imperative for policymakers to address this issue in order to exercise responsible spending and safeguard the financial well-being of the country.
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