Republicans who attacked Biden’s stimulus bill embrace money
WASHINGTON – In her annual budget speech this month, South Dakota Republican Governor Kristi Noem blamed President Biden’s economic policies for rising prices, mocked the ‘giant distribution’ federal stimulus funds and suggested that she had considered refusing the money on ideological grounds. objections.
But like many Republican officials, Ms Noem has struggled to say no to her state’s share of the $ 1.9 trillion pandemic relief aid that Democrats have passed along party lines in March.
Ms Noem explained to her fellow lawmakers how critical this federal funds were to South Dakota and how she would use some of the nearly $ 1 billion set aside for her state to invest in fuel supply projects. water, make housing more affordable and build new child care centers. For those who question her choice to take the money, Ms Noem, who has opposed Covid restrictions, including closures and mask warrants, said all pandemic relief funds qu ‘she rejected would have simply gone to other states.
“It would be spent somewhere other than South Dakota,” Ms. Noem said. “The debt would still be incurred by the country and our people would still suffer the consequences of these expenses. No state has refused the relief money, and if it did, it would go back to the Treasury Department, not to other states.
Republican leaders across the country have engaged in an equally awkward dance in recent months by accepting – and often defending – the money from the $ 350 billion bucket of state and local aid included in the stimulus bill, which was passed by Congress without a single Republican. vote. In some states, like Ohio and Arizona, Republican governors spend the funds while trying to undermine the law that allowed money to flow. Other governors blame Congress for not giving their state enough money.
And, like their counterparts in Congress, many Republicans have lambasted Mr. Biden’s stimulus bill for fueling inflation, even as they took the funds, and criticized Democrats for pushing for plans. additional government spending.
“I urge President Biden and the Democrats in Washington to turn off the tap on runaway spending and bring inflation under control,” said Gov. Greg Gianforte, Republican of Montana, whose state has used up part of his $ 906 million. dollars in stimulus funds. invest in nursing homes and back-to-work bonuses.
Florida Republican Gov. Ron DeSantis complained last week that the federal formula for allocating money to states based on their unemployment rates had essentially penalized Florida for failing to impose a lockdown and allow businesses to stay open during the pandemic.
“I think you have to recognize that we have the shorter term compared to these other states,” Mr. DeSantis said.
Florida, which has received a total of $ 8.8 billion, has so far received around $ 3.4 billion, which DeSantis says will go to infrastructure, transportation and hand retention. -work. The governor justified keeping the money by saying the federal government fueled the economic disruption with closures and warrants for vaccines and masks he opposed.
Despite his complaints, the cash cushion could help Florida build up to $ 17 billion in reserves by the end of next year, DeSantis says, and allow the state to afford to pay. for priorities unrelated to the pandemic. Mr. DeSantis proposed a gasoline tax exemption and an $ 8 million program to remove “unauthorized aliens” from the state. The money for this program would come from interest generated by state and local stimulus funds, a spokeswoman for Mr. DeSantis said.
A Treasury spokeswoman said the agency had not pre-approved uses of funds, but any funds used “in violation of eligible uses” of Treasury rules could be clawed back by the federal government.
States, which have until 2026 to spend stimulus money, receive their share of federal funds at a time when budgets are recovering faster than expected, with many governments inundated with cash and announcing large surpluses .
A November spending report from the National Association of State Budget Officials found that state revenue rose 12.8% this year after declining in 2020 for the first time in a decade . State spending on federal funds has grown 35.7% this year, and more money is on the way as many states will receive their second tranche of relief money in 2022. The recent passage of the Law on The $ 1,000 billion bipartisan infrastructure will also send more federal funds to local communities.
It’s a much different picture from what state officials expected at the start of the pandemic, when budget officials across the United States warned of severe shortages as businesses shut down. , workers were losing their jobs and healthcare costs skyrocketed. But a stronger-than-expected economic recovery and trillions of dollars in relief money left states with a new problem: how to spend it.
State officials say the biggest challenge has been figuring out how to get federal money amid a complex set of spending rules that have yet to be finalized by the Treasury Department.
“It’s like the python that ate the rat,” said Brad Whitehead, a non-resident senior researcher at the Brookings Metropolitan Policy Program, of the struggle to direct so much federal money into state projects. “You need all of those calories, but it’s hard to digest them all at once. “
The Treasury Department has given states broad discretion over how stimulus money can be deployed, but has placed limits on the use of funds to support public retirement programs and has prevented states from use relief funds to subsidize tax cuts. The ban on tax cuts has angered several Republican governors, who have argued that it undermines state sovereignty and has led to a multitude of lawsuits.
Among those challenging the restriction is Ohio, which received nearly $ 5.4 billion in state aid as part of the US bailout. Gov. Mike DeWine, a Republican, opposed the entire package and, after its passage, his state played a leading role in the litigation, claiming it was illegal to impose conditions on it. relief money that prohibited states from using it to fund tax cuts.
The lawsuit is still pending in court, but in June Mr DeWine signed a law to use more than $ 2 billion of federal funds to replenish the state’s unemployment benefit fund, to improve the quality of water and sewage systems and to improve the behavioral health of children. facilities.
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Texas announced in October a series of plans to begin spending part of its nearly $ 16 billion in federal aid, unveiling major investments in broadband, rural hospitals and food banks. Yet the state, which received the second largest allocation of funds in the country, also said it hoped to use some of the funds to reduce property taxes and that despite being prohibited from doing so, it was reserving 3 billion dollars for “future tax relief.”
The most controversial use of federal funds this year was in Arizona, where Republican Gov. Doug Ducey used relief funds to roll out two education programs meant to undermine mask mandates imposed by some school districts. A $ 163 million program provides up to $ 1,800 in additional funding per student at public and charter schools that “follow all laws of the state” and are open for in-person instruction. Schools that required masks would not be eligible.
A separate $ 10 million program provides vouchers worth up to $ 7,000 to help poor families leave neighborhoods that require face coverings or impose other Covid-related ‘constraints’.
The Treasury Department warned Ducey in October that the state could lose part of its $ 4.2 billion if it does not change its policy. Arizona denied the request and a senior Treasury official said an administrative process was underway to recover some of the funds.
A spokesperson for Mr. Ducey did not respond to a request for comment.
White House officials have said that despite some disagreements over relief money, governors and their staff work well in private with the Biden administration.
“I have had direct conversations with virtually every Republican governor or their senior officials, and for one, they have had constructive, apolitical, crazy and bolt-on conversations about how best to use the bailout funds. America for things like broadband, schools, water and workforce development in a way that meets the needs of their state, ”said Gene Sperling, who is the relief czar in Mr. Biden’s pandemic case.
Other aspects of the relief program have remained in limbo since its passage, including a $ 4 billion debt relief program aimed at helping minority farmers. It remains mired in litigation brought by some white farmers and conservative groups such as America First Legal, which is led by former Trump administration official Stephen Miller. They argue that the program, which was a centerpiece of the Biden administration’s racial equity agenda, unfairly excludes white farmers on the basis of their race.
The debts of minority farmers, who have suffered years of discrimination by the agriculture ministry, have not yet been canceled.
John W. Boyd Jr., president of the National Black Farmers Association nonprofit, said he found it wrong that states like Texas, where the Agriculture Commissioner is suing to block relief from the debt, grapple with how to spend their relief money while Black farmers cannot access their aid funds and are threatened with foreclosure.
“I think this is woefully unfair,” Mr. Boyd said. “But this is the continuation of what we have endured in this country.