More than three years after the COVID pandemic ended, state and local governments are racing to spend billions in unused pandemic relief money. The federal government doled out some $350 billion to states, cities and counties during the pandemic, much of it part of the American Rescue Plan Act of 2021. A new government watchdog report finds that as of earlier this year, states have only spent 60% of COVID recovery funds from the Rescue Plan. But they have until the end of this year to obligate the rest and until the end of 2026 to spend it.
To that end, the report finds states had obligated 84% of the funds as of earlier this year, but they will no doubt find a way to earmark the rest of it. Local governments have been using the funds on various things, many unrelated to the pandemic. One city bought new fire trucks, other cities and counties used funds to plug budget shortfalls elsewhere. Harris County is trying to use its unspent COVID money to fund the "Uplift Harris" basic income program---which is currently on hold while being challenged in court.
At a time when our national debt is exploding and the government is running massive annual deficits, critics see this as yet another example of government waste. "We really have a spending crisis happening at the federal level," says Vance Ginn, Texas economist and economic consultant. "And unfortunately with these COVID funds, if (states) keep them---and I suspect they will---they are wasting scarce taxpayer money."
Ginn tells KTRH this is a good place to start reining in the spending crisis. "The current amount of money still available for COVID relief years after the COVID situation has passed is ridiculous," he says. "States should give that money back, and that way it helps to reduce the federal deficit over time."
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