Veterans, carpenters and vaccines: What's at stake if US COVID aid is
canceled
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[March 17, 2023]
By Andy Sullivan
WASHINGTON (Reuters) - A Republican proposal to cancel unspent COVID-19
relief money could undercut healthcare for military veterans and
pensions for blue-collar workers while doing little to improve the U.S.
fiscal picture, a Reuters review of federal spending figures found.
The flood of COVID-relief aid -- $5.2 trillion in all -- that Congress
approved in 2020 and 2021 under Republican President Donald Trump and
his Democratic successor Joe Biden has emerged as an early target for
House of Representatives Republicans as they search for ways to rein in
federal spending.
House Republicans, who hold the majority in that chamber, have said the
will not vote to raise the federal government's $31.4 trillion debt
limit without a deal to cut spending. Failure to raise the limit would
lead to a default that would shake the economy.
But unspent COVID aid is a small target, with less than $80 billion
unspent as of January, White House budget figures show. Medical programs
to combat the virus have run through most of their funding and the
expanded safety-net programs that helped Americans weather the
disruption have largely run their course.
That total -- 1.5% of the amount authorized by Congress -- will decline
further in coming months as federal agencies continue to push money out
the door. Federal spending on health care and food stamps is also due to
decline when Biden allows the government's public-health emergency to
expire in May.
"At this point we are so late in the game that we are just not going to
recover much," said Marc Goldwein, a policy director at the Center for a
Responsible Federal Budget, a nonpartisan watchdog group.
Republicans say that's no reason to ignore the remaining money as they
assemble a spending-cut proposal.
"Clawing back any unspent funds from the trillions that Washington
flooded the economy with during the pandemic is an obvious starting
place for any debt ceiling discussion," said Tim Reitz, executive
director of the House Freedom Caucus, one of several Republican groups
that has said the remaining aid should be canceled.
Democrats and Republicans have largely agreed not to trim the Social
Security and Medicare programs, which account for about one-third of the
nation's $6.2 trillion budget, leaving lawmakers to look for smaller
targets for cuts.
CARPENTERS, VETERANS AND MEDICAL RESEARCH
Reclaiming unspent COVID funds would have real-world repercussions.
The largest chunk, $47 billion, is earmarked for financially troubled
union pension funds that have asked the federal Pension Benefit Guaranty
Corporation for help. The agency prioritized the most troubled pension
funds first and is now working with those that are less in need of
immediate aid, a White House official said.
If Congress reclaimed that money, fishermen in Massachusetts and
carpenters in Ohio, would be among the roughly 1 million union workers
that would not receive their full retirement benefits.
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Following CDC approval for vaccination
of children aged 6 months to 5 years, 10 month old Hazel Ribnik
reacts, as nurse Jillian Mercer administers the Moderna vaccine for
the coronavirus disease (COVID-19) at Rady Children?s Hospital in
San Diego, California, U.S., June 21, 2022. REUTERS/Mike Blake
A clawback could also affect
veterans' healthcare, as the Department of Veterans Affairs has yet
to spend $4.6 billion of the money it received for COVID-19 related
care. The health system is currently treating 4,500 patients for the
disease, according to an agency dashboard.
Another $6.8 billion remains to fight the virus itself by developing
improved vaccines and tests and researching topics like long COVID,
according to the White House.
Other remaining pots of money include $3.2 billion for small
business aid and $2.5 billion for bus and subway systems that have
struggled with declining fare revenue. Much of that money has been
designated for specific recipients, according to the White House.
SOME MONEY WON'T BE SPENT
Some funding that remains on the books will never be spent, and thus
offers no potential budget savings.
The Transportation Department handed out less than $700 million from
a $3 billion fund that aimed to preserve airplane-manufacturing jobs
after several major firms declined to participate, for example.
Businesses also claimed less than Congress anticipated in tax breaks
to keep employees on the payroll and provide COVID-related sick
leave, according to the U.S. Government Accountability Office.
RED STATES REJECT SOME MONEY
Some Republican-led states opted out of expanded unemployment and
food-stamp benefits, saying they discouraged work. That led the
federal government to spend less than it would have otherwise.
Republican governors of Nebraska and Arkansas last year rejected a
second round of aid for people behind on their rent. Those dollars
were then given to other states.
But Republican and Democratic-led states alike accepted $350 billion
in 2021 and 2022. They have until the end of 2024 to decide how to
spend it and until the end of 2026 to actually do so.
That money sits in state and local government coffers, beyond the
reach of Congress. Republican Senator Rick Scott in January urged
governors and mayors to voluntarily return that money to help pay
down federal debt.
The Treasury Department said it had not seen many state and local
governments return funds, though it did not provide a specific
dollar amount.
(Reporting by Andy Sullivan; additional reporting by David Morgan;
Editing by Scott Malone and Alistair Bell)
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