Republican US Senator from Missouri Eric Schmitt speaks during a press conference on May 15, 2024 at the Capitol. Republican Senator from Kansas Roger Marshall is on the left and Wisconsin Republican Senator Ron Johnson is on the right. (Jennifer Shutt/States Newsroom)
WASHINGTON — The U.S. Senate on Wednesday rejected efforts to roll back Treasury Department guidance on how state and local governments can spend funding approved by Congress during the COVID-19 pandemic.
O 46-49 votes on the Congressional Review Act resolution ended an attempt by several Republican senators to block the Biden administration from changing the definition of “obligation” as it relates to State and Local Fiscal Recovery Funds and the timeline for spending some of that money.
Missouri Republican Sen. Eric Schmitt said during the debate that the Treasury Department’s change in guidance, released in November, was trying to “move quickly” through Congress.
“Treasury’s sleight of hand attempt to keep the COVID spending spigot open is an insult to Congress and those who believe in our Constitution, as well as a gross misuse of taxpayer dollars,” Schmitt said.
The fund for state and local governments, Schmitt said, was intended to help with “revenue shortfalls tied to the COVID-19 pandemic” and the law clearly stated that “all costs incurred with money from this fund must be incurred by the 31st of December 2019”. 2024.”
The interim final rule that the Treasury Department released around Thanksgiving extended that deadline by two years for “administrative and legal costs, such as compliance costs and internal control requirements,” he said.
“This rule ensures that funding does not go to bridges or broadband, but to bureaucrats,” Schmitt said.
Projects affected in several states
Oregon Democratic Senator Ron Wyden spoke against the CRA resolution during debate, saying it could have impacted 17 projects in Georgia, 160 in Michigan, 342 in Ohio, 50 in Arizona, 404 in Montana and 73 in West Virginia.
“Across the country there could be thousands of closed projects. Dozens or even hundreds of jobs lost,” Wyden said. “This is one of the most unusual votes I’ve seen recently, a real surprise.”
Wyden said he doesn’t “see a good reason for the United States Senate to roll back solid, bipartisan progress and have this chamber act in a way that leaves more of our nation’s infrastructure in a state of disrepair.”
Schmitt said during a press conference before the vote that the claim that the CRA resolution would have impacted projects already underway was a lie.
“Essentially, obligations undertaken before the end of 2024 under existing legislation will be honored,” Schmitt said. “What this says is that you can’t extend this to ’25 and ’26. That was never the intent of Congress here.”
Kansas Republican Senator Roger Marshall, also speaking at the GOP press conference, said the CRA resolution would recover about $13 billion and went so far as to call it “illegal spending.”
“Time will run out, but Joe Biden is trying to get around the law once again,” Marshall said, adding that the COVID-19 pandemic is over and spending on these laws needs to be reduced.
Counties, cities oppose
Schmitt presented the two-page CRA resolution in February along with Marsha Blackburn of Tennessee, Mike Braun of Indiana, Tom Cotton of Arkansas, Joni Ernst of Iowa, Bill Hagerty of Tennessee, Ron Johnson of Wisconsin, Cynthia Lummis of Wyoming, Marshall and Rick Scott of Florida.
The National Association of Counties, the National League of Cities and the Government Finance Officials Association urged lawmakers to vote against the CRA in a written statement released Wednesday before the vote.
“The $350 billion SLFRF has provided $65.1 billion to every city and county in America, and since 2021, localities have used these crucial resources to meet the unique needs of residents and support economic prosperity throughout long term,” the statement said.
The three organizations wrote that the Treasury Department’s interim final rule “recognized the importance of flexibility to facilitate the effective implementation of recovery funds, including our ability to use funds for certain personnel costs and to reobligate funds when necessary.”
The White House released an Administration Policy Statement on Wednesday saying President Joe Biden would veto the CRA if it reached his desk.
The CRA resolution, he said, “could result in projects being canceled midstream, reduced project management and oversight, and higher costs as state and local governments are forced to contract programs.”
“Nearly all SLFRF funds have been committed to projects, including infrastructure projects and disaster relief eligible under bipartisan legislation,” the SAP said. “SJ Res. 57 would create unnecessary uncertainty for recipients executing projects, compromise important ongoing work, and inappropriately constrain Treasury’s ability to resolve ongoing implementation issues.”
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